New to Investing? These Resilient Stocks Could Guide You Through Market Turbulence

Are you looking for resilient stocks to buy for a starter portfolio? Here are three stocks that could outlast the market volatility.

When you are new to investing, it is smart to start conservatively and then add risk from there. That is why a lot of new investors prefer dividend stocks. When you invest in dividends, you collect a tangible cash income return. That can be comforting during times of stock market volatility.

investor looks at volatility chart

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Never buy a stock just for its dividends

However, dividends for the sake of dividends can potentially be a dangerous strategy. High dividends (like those with a yield over 8%) can seem very attractive. The problem is that high-yielding stocks tend to have major business or financial risks that are causing the stock to drop and the yield to rise.

An overtly elevated yield is not useful if that dividend is cut or if it becomes elevated because the stock has declined significantly. That is why it is better to sacrifice yield for the sake of owning a better-quality company. The smartest you can do is collect a mix of stable, growing income and modest capital appreciation.

If you want some resilient stocks with that profile, here are three a new investor should consider.

Intact Financial

Intact Financial (TSX: IFC) is a great, resilient TSX stock. Its stock is up 17% this year and 123% in the past five years. It only yields 1.8% right now. However, it has grown that dividend consecutively for 20 years.

Intact is considered a very solid stock to hold for the long term. Everyone needs basic insurance, whether it be for their vehicle, apartment rental, or house. Intact is the largest property and casualty insurer in Canada.

With its scale, it can offer some of the best rates in the market. It can be opportunistic to take market share when other providers are pulling back.

Intact has growing operations in the U.K. and a productive specialty division. It is an established player, but it still has more upside as it continues to execute.

AltaGas

AltaGas (TSX: ALA) is another stock to hold for defence and growth. For a utility/midstream company, it has delivered a very good return in the past five years. Its stock is up 132% in that time!

AltaGas has executed an excellent turnaround strategy. It has divested non-core assets and drastically reduced debt. Today, it has an attractive mix of stable and growing assets.

AltaGas yields 3.1% today. It has been growing its annual dividend by a mid-single-digit rate for the past several years. That is likely to continue going into the future.

EQB stock

Another stock for income and capital gains is EQB Inc. (TSX: EQB). It owns EQ Bank, which is Canada’s largest online-only bank. It has been the fastest-growing bank in Canada for several years.

Since the bank operates online, it can provide customers with attractive perks like free Interac transfers and elevated savings rates. The bank is a highly attractive option to students, newcomers, and families. As a result, it has been gaining steady market share.

It yields 2.14% right now. However, it has been growing its dividend by a double-digit rate for two decades. EQB still has plenty of growth ahead, and you get to enjoy it both for dividends and capital upside.

Fool contributor Robin Brown has no position in any of the stocks mentioned. The Motley Fool recommends EQB and Intact Financial. The Motley Fool has a disclosure policy.

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