In volatile market conditions, investors often seek safety in stable, income-generating stocks. The strategy of buying low and selling high is easier said than done, especially during downturns. However, focusing on resilient businesses that consistently deliver profits and reward shareholders can make a significant difference. Here are some safe Canadian stocks to buy now and hold during periods of market uncertainty.
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Toronto-Dominion Bank: A strong dividend play amidst challenges
Toronto-Dominion Bank (TSX:TD) has faced some turbulence in recent years, underperforming compared to its Big Six peers over the past one, three, and five years. While it’s been a powerhouse in the past, the bank has seen its stock lag. Most recently, it was due to its failed anti-money laundering practice that led to a fine and capped growth in the United States.
Despite this, TD remains a solid choice for investors seeking income. With a dependable dividend yield of 5.1%, it offers reliable cash flow to income-hungry investors, even as the stock price fluctuates. While not as secure as GICs, which guarantee principal protection, TD stock’s long-term value proposition is still intact. For those with a long investment horizon and can weather the volatility, this stock remains a strong income-generating asset.
CAPREIT: A real estate stock with solid upside potential
Canadian Apartment Properties REIT (TSX:CAR.UN) or CAPREIT has experienced a dip, falling over 18% from its peak this year. However, this pullback could be a great buying opportunity for investors. While the stock has struggled recently, analysts believe the REIT is poised for recovery. The most conservative outlook suggests a 12% upside over the next 12 months, while the consensus target hints at a 22% upside from its current price of $45.53 per unit.
CAPREIT also offers a competitive monthly cash distribution yield of 3.3%, making it an attractive alternative to GICs. This combination of capital appreciation potential and consistent monthly income is appealing, especially in uncertain times. With a reputation as a strong, stable business in the residential real estate industry, CAPREIT remains an excellent option for long-term investors looking to diversify and earn passive income.
Exchange Income: A rising star with monthly dividends
Exchange Income (TSX:EIF) has garnered attention for its impressive growth and monthly dividend payments. While monthly dividend stocks are relatively rare, Exchange Income’s commitment to providing investors with regular income has made it a popular choice. Over the last year, the stock has risen by 25%, fueled by falling interest rates and growing demand for stable dividend-paying stocks with attractive yields.
Despite its smaller market cap of $2.7 billion and investors who may be less familiar with it, Exchange Income has built a diversified portfolio in aerospace and aviation, and manufacturing. It has maintained a solid dividend-paying history since 2004, highlighting its ability to navigate through economic cycles. Analysts remain bullish on Exchange Income, forecasting a potential 21% upside from its current price of $57 per share.
The Foolish investor takeaway
Market volatility can be unsettling, but it also presents opportunities for savvy investors. Stocks like TD, CAPREIT, and Exchange Income provide reliable income streams and long-term growth potential. By focusing on durable, dividend-paying companies, investors can build a resilient portfolio capable of weathering market storms.
