Market Turbulence Ahead? Take Shelter With 2 Handpicked TSX Stocks

Take shelter from a stock market crash with safe stocks like Enbridge and Fortis, which are yielding 5.3% and 3.3%, respectively.

Key Points
  • • With heightened geopolitical tensions and market risks suggesting a potential stock market crash, defensive TSX stocks like Enbridge (31 consecutive years of dividend growth) and Fortis (51 consecutive years of dividend increases) offer portfolio protection through their stable, essential businesses.
  • • These utilities and energy infrastructure companies generate predictable cash flows through regulated operations and long-term contracts, making them resilient during market downturns—historically, the March 2020 crash proved to be an excellent buying opportunity as the TSX has rallied 160% since those lows.
  • 5 stocks our experts like better than Fortis

A stock market crash is a sudden and dramatic drop in the value of stocks. Throughout the history of stock markets, there have been quite a few stock market crashes. This is the nature of stock markets and is to be expected as the market reacts to global and domestic events and crises.

The last stock market crash was at the start of the Covid-19 pandemic in March 2020. This was a stressful period but, in fact, it represented one of the best times to buy TSX stocks, as the market has rallied a shocking 160% since March 2020 lows. Clearly, Canadian investors who owned the right TSX stocks throughout these crashes fared well.

Given the rampant geopolitical issues today, such as the war in Iran, trade tensions, and the many other conflicts that exist, preparing for a crash seems like a logical move. Over the last few days, tensions have been reaching the boiling point. Danger appears imminent, leading investors to wonder, “Will the stock market crash on Monday”?

In this article, I’ll discuss two TSX stocks that are well-positioned to shelter your portfolio from TSX stock market weakness.

a person watches a downward arrow crash through the floor

Source: Getty Images

Enbridge

Enbridge Inc. (TSX: ENB) is a North American energy infrastructure behemoth with midstream assets including pipelines and gas storage facilities, as well as an extensive utility business in the U.S.

These businesses underpin a business that generates strong and predictable cash flows that are relatively immune to economic cycles. The utilities business is regulated, and Enbridge’s energy infrastructure assets are supported by long-term, take-or-pay contracts. This dynamic creates a low-risk business that has proven to be a reliable one.

Enbridge’s dividend track record is evidence of the stability of the company and the stock. With 31 consecutive years of dividend growth, investors can clearly rely on Enbridge through thick and thin. And through stock market crashes!

Looking ahead, Enbridge will continue to benefit from low interest rates, and the rising demand for electricity, oil, and natural gas. While this demand profile could weaken in economic turbulence, it’s pretty resilient as the need for energy is an essential need.

Fortis

The other TSX stock that I’m recommending here is Fortis Inc. (TSX: FTS). Fortis is a pure utility company that has an extensive footprint in North America.

As a reflection of Fortis’ stability and predictability, I would like to draw your attention to Fortis’ dividend history. This history includes 51 consecutive years of increasing dividend payments. It also includes very generous dividend growth rates. In the last 30 years, Fortis’ annual dividend has increased more than 500% to the current $2.56.

All of this was accomplished despite the fact that there were recessions and stock market crashes throughout this time period.

The bottom line

So, will the stock market crash on Monday? I don’t know. Nobody really does. All I can say is that the conditions seem to be setting us up for a stock market crash – high valuations, a prolonged period of optimism and growth, escalating geopolitical turmoil, and of course, high debt loads and economic uncertainties.

But we can’t control all that. What we can control is the stocks we buy. The two TSX stocks discussed in this article are gems in all markets, but especially in today’s market where the risks are high.

Fool contributor Karen Thomas has a position in Enbridge. The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy.

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