Market volatility was all the rage last year. So far in 2024, the market is faring better, but that volatility persists in the minds of investors. Fortunately, new and seasoned investors learn that after a market downturn, a great opportunity unfolds.
That opportunity involves buying some great stocks at a hefty discount, especially after a market downturn. Here’s a look at some of those options to consider for your portfolio.
Banking on a recovery, solid income, and growth to continue
It would be nearly impossible to mention stocks to buy after a market downturn without noting one of Canada’s big banks. And that bank for prospective investors to take a look at is Canadian Imperial Bank of Commerce (TSX:CM).
CIBC is the smallest of the big banks. As a result, the bank lacks the massive international market exposure its larger peers have. This means that CIBC’s concentration is focused on the domestic mortgage market.
That concentration has made the stock more volatile than the other big banks, resulting in the stock dropping over 20% in the past two years. In fact, CIBC’s two-year dip is more significant than any of its big bank peers. But that doesn’t make it a poor option to consider. If anything, it’s the opposite.
More recently, CIBC has started to trim those stock losses. In fact, over the trailing 12 months, CIBC has actually outperformed its peers, rising 3%.
So then, why should investors consider CIBC as a buy after a market downturn? Apart from the old adage about buying when others are fearful, there’s also history to fall back on. Canadian banks have fared better historically over their U.S.-based peers during downturns.
Additionally, as noted above, CIBC has already begun to recover nicely from its lows. And that represents a huge long-term opportunity.
Adding to that appeal is the fact that CIBC offers a juicy quarterly dividend that pays out a yield of 5.81%.
In other words, CIBC is a great (still discounted) buy to confidently buy, even after a market downturn.
Don’t let this stock drag you down
When the market drops, it often brings down even the most defensive stocks. One such example is Fortis (TSX:FTS), which is one of the most defensive picks on the market. For those unfamiliar with the stock, Fortis is one of the largest utility companies in North America.
Utilities like Fortis generate a stable revenue stream that is backed by long-term regulated contracts. Those contracts provide a recurring and predictable revenue stream, allowing the company to invest in growth and pay a handsome dividend.
That makes them excellent options to consider, even after a market downturn.
As of the time of writing, Fortis’s yield works out to an appetizing 4.38%. Even better, prospective investors can take solace in knowing that Fortis has provided annual upticks to that dividend for an incredible 50 consecutive years.
That fact alone makes Fortis a stellar long-term option to buy in any environment — even after a market downturn.
Telecoms are great options to consider, too
A third stock to consider after a market downturn is BCE (TSX:BCE). BCE is one of the largest telecoms in Canada, boasting a nationwide subscriber base. BCE’s core subscription business includes wireless, wireline, internet, and TV segments.
Additionally, the company also boasts a massive media segment that includes radio and TV operations across Canada.
Telecoms are excellent long-term options, even after a market downturn, due to their reliable revenue streams. Those revenue streams are becoming more of a necessity, thanks to both the need for reliable home internet and fast mobile connection.
Demand for those services has grown considerably since the onset of the pandemic, further enhancing the defensive appeal of the stock.
Those reliable revenue streams provide yet one more advantage to prospective investors: a juicy dividend.
BCE has been paying out dividends for well over a century without fail. The company has also provided annual upticks to that payout for over a decade. Today, the yield on the quarterly dividend is a juicy 7.02%, making it one of the best-paying options on the market.
