Rising interest rates and overall market volatility have led many to seek out solace in safe stocks for investors. Fortunately, the market does provide plenty of options to consider investing in, even during volatile times.
Here are three safe stocks for investors to consider buying now, even in the face of rising interest rates.
This stock provides a solid defence
During times of uncertainty, investors seek out defensive stocks that can weather market volatility. And that defensive appeal is only one of a handful of reasons why Fortis (TSX:FTS) is one of the safe stocks for investors to consider.
Fortis is one of the largest utilities in North America. The company boasts 10 operating regions with operations across the U.S., Canada, and the Caribbean. That geographic diversity is coupled with a lucrative business model that makes Fortis one of the most defensive stocks on the market.
In short, utilities provide a service that is backed by long-term regulated contracts which span decades. This translates into a recurring and stable revenue stream, which the utility then uses to invest in growth and pay dividends.
In the case of Fortis, that dividend works out to a respectable 4.02%. Fortis has also provided investors with a solid 49 consecutive years of dividend increases and is on track to hit that 50-year milestone.
While this stock provides the growth
Some stocks provide growth only at certain times of the year. Fortunately, Alimentation Couche-Tard (TSX:ATD) is one of the growth-focused safe stocks for investors to buy year-round.
Couche-Tard is one of the largest convenience store and gas station operators on the planet. That’s a segment of the market that investors often are dismissive of, despite the overall stickiness of the business model. In fact, Couche-Tard is one of the best-performing stocks on the market of the past decade, up over 500%.
In the trailing 12-month period, the stock is up over 30%.
So then, what makes this a safe stock for investors to consider? Apart from the defensive appeal of its business, Couche-Tard has taken an aggressive stance towards growth, both from acquisitions and evolution.
In fact, earlier this year Couche-Tard acquired nearly 2,200 gas stations across Europe in a $3.3 billion deal. And that’s just the beginning.
Couche-Tard is steadily evolving its traditional gas station and convenience model to accommodate shifts in the market – specifically, the introduction of EV charging stations and services for customers that are charging up.
Couche Tard is already building out a 200-site EV charging network in North America, following a similar development in Europe. That network is set to be fully operational next year.
This stock can provide the income
Another safe stock for investors to consider buying right now is Bank of Montreal (TSX:BMO). BMO is Canada’s oldest bank and boasts nearly two centuries of dividend payments without fail. Today, that yield works out to a juicy 4.95%, making it a great addition to any well-diversified portfolio.
But what makes BMO a safe stock to consider given the rapid interest rate hikes we’ve seen? That comes down to a few key points.
First, we have growth potential. Earlier this year, BMO acquired California-based Bank of the West. The deal expanded BMO’s U.S. footprint to 32 state markets, adding hundreds of branches and billions in deposits and loans.
The deal also propelled the bank into position as one of the largest lenders in the U.S. market.
Second, we have BMO’s dividend. In addition to the juicy yield mentioned above, BMO has provided annual or better bumps to that dividend for well over a decade. Prospective investors with $20,000 to invest in BMO can expect to generate an income of nearly $1,000 in just the first year.
And perhaps best of all, investors not ready to draw on that income yet can choose to reinvest those earnings, allowing them to grow until needed.
Line your portfolio with safe stocks for investors
No investment is without risk, and that includes the trio of stocks mentioned above. Fortunately, the above stocks boast significant defensive appeal that will help to weather market volatility.
In my opinion, one or all of the above stocks should be part of any well-diversified portfolio.
