Trade war or free trade? Right now, the political sentiment changes by the day. It makes it incredibly difficult to know how to invest. Which stocks are safe and which are not? It is really hard for businesses to grow when fundamentals about the economy are so uncertain.
Canadian investors are all wondering how to navigate these choppy waters. One of the best things you can do is simplify your strategy and get down to basics. Which stocks provide essential products or services that people/businesses need?
These should fare well through the crisis. Here are four safe Canadian stocks to hold if you have trade war jitters right now.
Source: Getty Images
A stable real estate play to hold through economic worries
First Capital Real Estate Investment Trust (TSX: FCR.UN) is an ideal safe stock to hold through tough times. It operates Canada’s largest portfolio of urban-focused retail properties.
Its properties are anchored by top Canadian grocery chains and complimented by a mix of pharmacies, banks, liquor stores, discount stores, and medical practices.
Even when times get tough, Canadians need these services. Consequently, First Cap has a very stable tenant base. Occupancy sits close to 97%. Demand for its well-located properties remains strong, as does rental rate growth.
Even after a recent little bump in the stock price, First Capital remains a cheap stock with a lot of underlying value. It also pays a nice 5.2% dividend yield.
A safe utility stock to hold through volatility
AltaGas (TSX: ALA) is an attractive, safe, and steady stock to hold right now. The company has executed a very strong turnaround strategy in the past few years. It has focused on its growing regulated utility business in the United States, divested cyclical assets, and drastically reduced debt.
The energy infrastructure firm is more sustainable and predictable than ever before. ALA stock is up 81% in the past five years. It has vastly outperformed almost all other utility stocks in Canada over that period.
Since 2020, it has grown its annual dividend per share by a 5%-plus compounded annual growth rate. Management targets 5–7% annual dividend growth going forward. This safe stock yields 3.4% right now.
A safe retail stock is a hold under uncertainty
Loblaws (TSX: L) is Canada’s largest grocer with grocery offerings for almost every budget. It has a strong position in most Canadian communities.
Given its scale and wide market presence, the grocery chain has a lot of sway with suppliers. That allows it to offer the best discounts to its customers. Likewise, a strong loyalty and rewards program helps keep customers returning.
This safe stock has delivered a sector-leading 166% return in the past five years. It has been a solid bet through some tumultuous times, and I suspect that will continue ahead.
A secure infrastructure stock to hold for safe dividends
Secure Waste Infrastructure (TSX: SES) offers a wonderful mix of income, value, and modest growth. Secure operates a portfolio of energy processing and waste infrastructure assets in Western Canada. This safe stock is a crucial waste provider to the Canadian energy patch. It also has a growing position in metal recycling.
This company is very profitable with a high rate of cash conversion. Over 80% of its revenues are contracted or recurring in nature. In many of its regions, it operates a monopoly. Its services are essential to its customers.
Secure trades at an extreme discount to its large waste peers. The company has been aggressively buying back stock. This safe stock also pays a near 3% dividend yield.
