It can be difficult to think about long-term investments when the markets keep shifting in all directions on any given day. The ongoing market volatility due to the Middle East crisis might make it challenging, but a long-term strategy is exactly what Canadian investors need right now.
No matter what has been happening for the past few months, it’s important to remember that stock markets are cyclical in nature. It means things will eventually settle down. Here are a few TSX stocks that I would pick while the market navigates through the current volatile period.
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Fortis
Fortis Inc. (TSX: FTS) is a $39.1 billion market-cap stock that is a staple in many investor portfolios. The utility holdings company owns and operates several utility businesses across regulated markets. Almost its entire revenue comes from long-term contracted assets, meaning that it generates virtually guaranteed and predictable cash flows.
Boasting a defensive business model, Fortis stock can deliver substantial returns through all market cycles. It is a dividend stock with an over 50-year track record for increasing quarterly payments each year, backed by solid fundamentals. It can be an excellent investment, trading for $76.74 per share at writing and boasting a 3.3% dividend yield.
Descartes Systems Group
Descartes Systems Group Inc. (TSX: DSG) is an $8.5 billion market-cap player in the global logistics and supply chain management industry, providing advanced solutions to clients worldwide. The company generates high recurring revenues, backed by a solid demand. It has a solid and cash-rich balance sheet, alongside strong profit margins.
The company has been growing organically and continues with strategic acquisitions, especially as the tech sector valuations seem to be depressed right now. As of this writing, DSG stock trades for $98.92 per share. Down by almost 40% from its 52-week high, it is a bargain that is too good to ignore at current levels.
Pembina Pipeline
Pembina Pipeline Corp. (TSX: PPL) is a $36.4 billion energy infrastructure company that provides transportation and midstream services to the oil and gas sector in Canada. The company boasts a diversified infrastructure network across Western Canada, making it a crucial business in the region. With the Middle East conflict making the region’s crude oil harder to access, Canadian energy exports might become more important, putting Pembina stock in pole position to benefit.
If you are bullish about Canadian energy demand, PPL stock can be a good investment. Trading at $62.58 per share, it boasts a 4.5% dividend yield that you can lock into your portfolio today.
WSP Global
WSP Global Inc. (TSX: WSP) is a $29.1 billion market cap stock that has long been a compounder in the Canadian stock market. Despite pulling back significantly this year, WSP stock is up by over 600% from 2014. The engineering, design, and advisory firm has plenty of tailwinds that are driving continued demand for its services.
While it might boast a meager 0.70% dividend yield, this TSX stock can be a good long-term holding to realize capital gains. Held in a TFSA, you can enjoy the returns from the stock tax-free.
Firan Technology Group
Firan Technology Group Corp. (TSX: FTG) is a $525.6 million company from the aerospace and defence sector. It is the smallest stock I’ve discussed here, but it has the strongest long-term growth potential. The essential components it manufactures for the aerospace industry provide it with exposure to the commercial and defence markets.
Defence spending keeps rising, and FTG stock continues winning more contracts. As of this writing, it trades for $20.88 per share and can be a good investment to buy and hold for the long run.
Foolish takeaway
While well-positioned to navigate the volatility, these stocks are not immune to its impact. However, these TSX stocks tick all the right boxes for investments that can emerge stronger on the other side of this. I would allocate some of my investment capital to these stocks in the current climate.
