The S&P/TSX Composite Index has been unpredictable in the first four months of 2023, to say the least. With rapid swings in valuations, it is not surprising for market volatility to make investors wary of allocating any money to the stock market. With several macroeconomic and geopolitical factors impacting the global economy, equity markets worldwide are being dragged down.
As economists predict a mild recession in the U.S. later this year, rapid price movements might continue plaguing the Canadian markets. If you are worried about the market giving you whiplash, the TSX offers pockets of relatively safer assets you can consider investing in to offset volatility.
Today, we will discuss three TSX stocks you can consider adding to your portfolio to introduce a degree of stability during harsh economic environments.
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Alimentation Couche-Tard
Alimentation Couche-Tard (TSX: ATD) is a Canadian stock considered generally to be a good long-term holding. The $65.91 billion market capitalization company is a multinational operator of convenience stores with over 14,000 locations worldwide. It has one of the largest convenience store and gas station portfolios in the world and a stellar track record of acquisition-based growth.
Besides acquisitions, the company has managed to grow revenue and profits organically. It has grown its earnings by an annualized 16% over the last decade. Due to the essential nature of its services, it can continue generating strong cash flows through volatile market conditions.
Well managed and still making big acquisitions, it can be a good stock to buy and hold. As of this writing, Alimentation Couche-Tard stock trades for $67.99 per share.
Empire Company
Empire Company (TSX: EMP.A) is a slightly lesser-known but reputably reliable stock to own in the stock market. The $9 billion market capitalization company engages in multiple verticals, primarily focusing on food retailing, as its largest income stream.
The retail segment owns over 1,500 stores across 10 provinces under several banners and several retail fuel locations, generating steady revenues for the company.
While grocery stocks have lower profit margins, Empire Company stock’s business model aims for higher volumes. In volatile market environments, consumer staples can be a safe space to consider for stability. As of this writing, Empire Company stock trades for $35.38 per share, and it pays its shareholders their quarterly payouts at a 1.87% dividend yield.
Intact Financial
Intact Financial (TSX: IFC) is a $35.18 billion market capitalization Canadian multinational property and casualty insurance company. A prominent player in the Canadian financial services sector, Intact Financial stock can be a good way to diversify your portfolio away from the Big Six TSX bank stocks while remaining invested in the financial service sector.
The company’s growth in the international market has been through acquisitions over the years. As it continues to expand in the domestic market, analysts anticipate a similar dynamic to emerge in its presence in the U.K. and the U.S. in the coming years.
As of this writing, Intact Financial stock trades for $200.75 per share and boasts a 1.19% dividend yield. It can be a good addition to your portfolio in current circumstances.
Foolish takeaway
While the possibility of a full-blown market crash still exists, nobody can say if and when that might happen. In times of uncertainty, making strong bets in the market can help investors retain a degree of stability in reaching their long-term financial goals.
When the market whiplash has you worried, identifying and investing in relatively stable assets can offer a degree of protection for your self-directed portfolio. To this end, Alimentation stock, Empire Company stock, and Intact Financial stock can be good investments to consider.
