Safe Stocks to Buy in Canada for March 2023

In this market environment, it’s essential to shore up your portfolio and buy high-quality stocks that are safe and reliable.

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After a brief recovery to start the year, the market, both north and south of the border, has been selling off again as uncertainty picks up. Unsurprisingly, many Canadian investors are looking for safe stocks to buy in March 2023.

Although the market was recovering to start the year, it’s not surprising to see it begin to pull back again, especially considering the many headwinds that the economy faces. In fact, many expected a recession in 2023, and the hope was we could get a soft landing.

And despite the fact that it looked like inflation was peaking toward the end of 2022, the economy has continued to remain strong longer than most expected. This is leading to the potential for more interest rate increases this year, as well as higher rates for longer than expected.

That only adds to the uncertainty in the market, which is certainly hurting many stocks’ valuations. Plus, in addition to all the uncertainty, the underlying economy is impacting many companies as well, leading to lower forward earnings expectations.

This makes it essential that investors have a well-balanced portfolio and find high-quality and safe defensive stocks to buy that can help shore up your portfolio.

So if you’re looking for investments with robust operations that you can rely on in this uncertain environment, here are two of the best to consider.

Fortis is one of the top safe stocks to buy now

There are plenty of reasons to consider a utility stock like Fortis (TSX:FTS), if you’re looking to shore up your portfolio and buy safe stocks.

Utility stocks are well-known to be low-risk due to the essential services they provide and the fact that they are regulated by governments. This affords them highly predictable revenue and cash flow. In addition, Fortis is well diversified, owning many different utility operations, which ultimately makes it even safer.

The fact that Fortis is such a reliable stock is reflected in its incredible track record. Not only does it offer investors a yield of more than 4.1% today, but it has also increased that dividend every single year for 49 years, the second-longest streak of any Canadian stock. And going forward, Fortis’ guidance calls for 4%-6% increases in the dividend each year through 2027.

Therefore, Fortis is one of the best stocks you can buy now if you’re looking for a safe investment. Plus, because investors know it’s so reliable, it’s a stock that’s much less volatile, helping to protect your capital if the market was to sell off significantly.

So if you’re looking for safe Canadian stocks to buy now, Fortis is certainly a top investment to consider.

Finding reliable investments in residential real estate

Residential real estate is another highly defensive industry where you can find safe stocks to buy, and the largest and most diversified residential REIT is Canadian Apartment Properties REIT (TSX:CAR.UN).

Residential REITs saw the prices of their stocks impacted over the last year as the value of their assets have fallen along with housing prices. In addition, many REITs saw increasing operating costs as a result of surging inflation.

However, because the market has been so robust in Canada, many real estate stocks, including CAPREIT, have seen rental rates skyrocket on lease turnovers, which has more than offset the increasing expenses.

And now, as costs are coming back down, but rental rates remain high, CAPREIT has the potential to see its margins continue to increase significantly. In CAPREITs most recent quarter, it saw same-property net operating income increase by 7.2% year over year.

So although the stock market has faced increasing uncertainty lately and many stocks are being impacted today, CAPREIT has shown what a safe and reliable stock it can be, and why it’s one of the top investments to buy now.

It also has an impressive dividend growth streak increasing its distribution every year for over a decade. And today, the REIT offers investors a yield of roughly 3%.

And although the stock has already begun to recover, it still trades at an attractive valuation. So if you’re looking for reliable investments to buy today, CAPREIT is one of the best to consider.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

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