The alarms of an upcoming recession in the next 12 months are still ringing. Some experts believe that the chances of a recession are steadily increasing instead of going down. While a market crash is hardly something to look forward to, it’s also a time when many investors initiate a buying frenzy and pick up great stocks at low prices.
That’s a smart way to capitalize on a market crash, but if it doesn’t seem like your cup of tea, you may want to look at stocks that can help brace you and your portfolio for the impact. Loblaw Companies, Metro, TC Energy, and Emera can be the stocks you might want to consider to anchor your portfolio.
Food and pharmacy leader
Loblaw Companies is the largest food retailer and a pharmacy giant in the country. The company owns and operates 400 market stores, 1,300 pharmacy units, and 500 Real Canadian superstores throughout the country. Loblaw has several smaller companies and brands under its name.
Food and pharmacy are two of the most recession-resistant products out there, and Loblaw deals in both of them. The beta of the company also indicates a low-risk buy at 0.33. Currently, the company is trading at $62.42 per share. This is a market value growth of almost 14% from the same time last year. Loblaw is also a Dividend Aristocrat with a history of increasing dividends for six consecutive years. The current yield is 1.79%.
Another food and pharmacy leader
With 600 food stores and 650 drugstores to its name, Metro is another recession-resistant company to look into. It’s also another dividend royalty and has increased its payouts for six consecutive years. The current yield is a modest 1.44%.
Compared to Loblaw, Metro is an aggressive grower. Its market value grew a significant 85% in the past five years. It’s an almost 18% growth rate per year. Metro’s beta of 0.15 is not correlated to the broader market at all. Since food and medicine are two things people will need even in the worst of economic times, Metro will most likely sail through a market crash with relatively less damage.
An energy company
TC Energy is a long-standing Dividend Aristocrat that has already proven its salt by increasing dividends, even through the last Great Recession. The company has grown its payouts for 15 consecutive years. Currently, TC Energy provides a juicy yield of 4.44%.
The company has seen some ups and downs in the past five years, but this year has been especially good for its market value growth. Following an almost 35% increase since the beginning of 2019, the current market value of TC Energy is $68 per share.
A utility company
Another recession-resistant business is utilities, like Emera. The company generates and transmits electricity to almost 2.5 million customers in the country, the U.S., and the Caribbean. It’s also a Dividend Aristocrat with 12 years of consecutive increases in payouts.
The market value of Emera has grown 27.5% just this year, and it’s now trading at $55.68 per share. The beta of 0.25 also indicates low risk.
Foolish takeaway
It’s hard to predict the exact consequences a market crash will have on stocks. But you can learn from past crashes, and make smart choices about the companies you invest in so that your investments don’t take a very severe hit. You can also load up on good businesses when they are dirt cheap during a crash — companies that have a very high chance of fast growth when the recession is over. This might offset any losses you suffer during a crash.
