Once in a decade — that’s about how often we see a recession come along. And right now, Canadians (and the world over) are overdue for one. We’re expected to have a mild recession in 2023. It could mean that this is the only chance to buy up top stocks before they climb back from the depths.
And if there are three I’m buying today, it’s these.
Analysts believe it’s going to be a long climb back for Canadian Imperial Bank of Commerce (TSX:CM). CIBC stock has the most exposure to housing mortgage losses. However, it managed to come in with higher provisions for those losses than expected and reported fewer losses in general.
Even so, let’s say it’s one of the top stocks that does continue to experience losses. Unless you’re looking to sell in the summer, I wouldn’t worry about it. CIBC stock has long proven time and again that it’s a solid long-term investment.
In fact, let’s look back since the last recession, the Great Recession in 2008. Since that time, after falling an incredible 62% from peak to trough, shares then went on to climb 525% to where they are now! That’s a compound annual growth rate (CAGR) of 14% in about 14 years. It continues to trade at 8.76 times earnings and offers a dividend yield of 5.77% to lock up as the cherry on top.
Another of the top stocks to consider during this time is BCE (TSX:BCE). BCE stock continues to boast the fastest network speeds among its telecommunications peers. This has basically locked in its current major market share at 60%, because who’s giving up on speed at a time like this?
But BCE stock also has a long history of growth to look back on as well. And that includes dividend growth, too. Shares absolutely plunged during the Great Recession within just a month, falling 44% in that time. Yet since then, shares are back up 479% for a CAGR at 13% as of writing.
And, of course, you also get a solid dividend yield at 5.85%. Now, it’s not in value territory with a price-to-earnings ratio at 20.19. But given its long history of growth, this is one I would lock up now for decades of solid returns.
Now, here’s where things get tricky. Nutrien (TSX:NTR) continues to be a favourite of mine, because of its future growth prospects. After all, it’s merging a fractured crop nutrient and fertilizer industry. Yet it doesn’t have the history that these other top stocks have.
Even so, right now is an opportunity to get in on Nutrien stock and hold onto it for dear life. I really don’t believe that shares will get back to these prices after 2023. It continues to post solid earnings, make new partnerships, new acquisitions, and offer value again and again — all while remaining in the much-needed crop nutrient sector, as arable land becomes less.
Shares are up 78% since coming on the market in 2018, and it trades at just 5.53 times earnings right now. So, you can lock up a CAGR at 12%, which could rise higher if shares return to 52-week highs. Plus, you get a 2.52% dividend yield for this one as well.