2 Dividend Stocks to Buy Low Now and Sell High Later

Buy the dip on Fortis stock and Suncor Energy stock and sell these stocks at a higher price in the future.

| More on:

When stock markets were already trending cautiously due to the growth and supply-chain fallout of the COVID-19 outbreak, the sudden dip in oil price made matters worse.

As a result, markets all over the world crashed. Even though an extremely bearish market is not something investors want, it offers them an opportunity for the time ahead.

Buying the dip can turn out to be a winning investment strategy given that you are choosing your stocks carefully.

Here, I am going to discuss two dividend stocks that you can consider buying now to sell at a higher price in the future.

Fortis Inc.

Fortis Inc. (TSX:FTS)(NYSE:FTS) is an electric utility company that has been working in almost the entire North American Region. Based in Canada, the utility company has been operating energy infrastructure in the U.S., Central America as well as the Caribbean Islands.

Fortis shares have been trading low since mid-January. After the recent market crash, you can expect the stock to dip further. However, there’s a strong chances that the Fortis will recover from the current mayhem and register growth again.

The reason why Fortis can withstand the ongoing financial depression is its unique business blueprint. As a utility company with a large operational radius, Fortis never goes out of business and maintains a steady cash inflow.

During the 2008 recession, when most of the stocks and holdings fell by more than half the prices, Fortis managed to stop the drop at 15%.

The five-year capital project plan by Fortis hints at excellent future growth for the company. Fortis is going to invest over $18 billion in these projects that can increase its rate base around $38 billion in the next four years.

Fortis stock has witnessed the growth of 73.35% in the last five years, and this can continue with the successful execution of future capital projects.

Suncor Energy 

Suncor Energy (TSX:SU)(NYSE:SU) is an integrated energy company that primarily deals in oil sands. The company doesn’t just drill crude oil, but also runs four refineries and a network of over 1,500 Petro-Canada filling stations.

This holistic portfolio that covers upstream, midstream, downstream legs of the oil and gas sector makes Suncor Energy unique among other oil companies and less vulnerable to crude price fluctuations.

Regular oil producers drill crude and sell it as the final commodity. Falling oil prices severely affect such companies who just manage the one end of the supply chain.

In contrast, integrated oil companies like Suncor have the avenues to offset the profit cutbacks caused by the crude price drop. For instance, refinery margins rise when oil prices drop, and this is where Suncor can capitalize on the situation.

Since the beginning of the year, the Suncor Energy stock fell by around %15. You can consider buying the dip on this stock to sell it later for higher prices.

Conclusion

Dividend stocks don’t just offer a regular stream of additional income. You can also benefit from the overall growth of such stocks.

Today, when the entire market is experiencing depression, you should buy the dip on dividend stocks that are better expected to recover from the current plunge and can register high growth again.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Jason Hoang has no position in any of the stocks mentioned.

More on Energy Stocks

sources of renewable energy
Energy Stocks

Canadian Renewable Energy Stocks to Buy Now

Renewable companies in Canada are currently struggling through a challenging phase, but quite a few of them are still worth…

Read more »

oil pump jack under night sky
Energy Stocks

Is CNQ Stock a Buy, Sell, or Hold for 2025?

CNQ stock is down in recent months. Is a rebound on the way next year?

Read more »

a person looks out a window into a cityscape
Energy Stocks

2 No-Brainer Energy Stocks to Buy With $500 Right Now

Two low-priced energy stocks can reward investors who have limited capital with far superior returns than expensive peers.

Read more »

canadian energy oil
Energy Stocks

Where Will Suncor Stock Be in 1 Year?

Suncor Energy Inc (TSX:SU) stock is doing well this year. Will it still be doing well next year?

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Best Stock to Buy Right Now: Cenovus vs Baytex?

It may not seem like a good time to buy most energy stocks, but there are always exceptions.

Read more »

A bull and bear face off.
Energy Stocks

Dividend Investors: Top Canadian Energy Stocks for November

These three dividend-payers are on a bullish uptrend.

Read more »

analyze data
Energy Stocks

Buy 8,850 Shares of This Top Dividend Stock for $2,000/Month in Passive Income

Let's do the math on what it would take to generate $2,000 a month in passive income from Enbridge (TSX:ENB)…

Read more »

oil and gas pipeline
Energy Stocks

Is TC Energy Stock a Good Buy?

TC Energy stock has a lot going for it, but there are also a few red flags to consider before…

Read more »