2 Necessary Defensive Investments

Necessary defensive investments are everywhere. Finding the right mix of investments, such as these two stocks, will help fuel your portfolio to new highs.

| More on:

The market is full of volatility at the moment. Apart from the ongoing global pandemic, there are other events adding to overall market volatility. In recent weeks, that volatility has been fueled by short-sellers. To limit that volatility, adding one or more necessary defensive investments is always a good idea.

Here are two necessary defensive investments to consider for your long-term portfolio.

Power up your portfolio

Fortis (TSX:FTS)(NYSE:FTS) is a name that should be familiar to nearly all long-term investors. The company is one of the largest utilities on the continent, with operating regions spanning through Canada, the U.S., and the Caribbean.

Utilities are notoriously great investments for those investors looking for stable, long-term gains. This is due to the business model that utilities offer. In short, utilities provide a regulated service. That service is backed up by a long-term contract that spans decades. The contract ensures a steady stream of recurring revenue for the utility. That revenue stream helps fuel growth and provides investors with an ample dividend.

In the case of Fortis, the company provides a quarterly dividend that works out to a respectable 3.85% yield. Adding to that appeal is the fact that Fortis has provided investors with healthy consecutive annual bumps to that dividend going back well over four decades. That factor alone makes Fortis a great addition to a list of necessary defensive investments.

A century of dividends and it’s still offering massive long-term growth 

Canada’s telecoms are incredibly defensive investments. Chief among those Big Telecoms is BCE (TSX:BCE)(NYSE:BCE). BCE offers investors the full package. Apart from the bevy of typical subscription-based services, BCE has a massive media portfolio of TV and radio stations. The company even has an interest in professional sports teams.

Across all those segments, the company’s wireless segment is what investors should be most excited about. Wireless devices and the data connectivity they offer are taking on a larger role in our daily lives. They’ve already replaced hundreds of standalone devices we used to have in just over a decade. Additionally, each new device release brings with it the promise of additional functionality (and revenue for BCE). By way of example, in the most recent quarter, BCE reported 128,168 net new wireless subscribers.

Those subscribers and the revenue they provide help fuel BCE’s outstanding quarterly dividend, which provides a yield of 6.01%.

Necessary defensive investments are everywhere

Both BCE and Fortis offer investors a path to long-term growth while providing a stable income stream. The defensive segments of the market that they operate in makes them less prone to the volatility we’ve recently seen. Additionally, the fact that both have provided dividends to investors without fail for decades solidifies their position as necessary defensive investments for every portfolio.

In my opinion, both stocks should be part of any well-diversified, long-term portfolio.

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 Demetris Afxentiou owns shares of Fortis Inc. The Motley Fool recommends FORTIS INC.

More on Dividend Stocks

analyze data
Dividend Stocks

Here’s Why the Average TFSA for Canadians Aged 41 Isn’t Enough

The average TFSA simply isn't enough for most Canadians in their early 40s. Here's how to catch up.

Read more »

cloud computing
Dividend Stocks

Insurance Showdown: Better Buy, Great-West Life or Manulife Stock?

GWO stock and MFC stock are two of the top names in insurance, but which holds the better outlook?

Read more »

concept of real estate evaluation
Dividend Stocks

How to Earn a TFSA Paycheque Every Month and Pay No Taxes on It

Canadian REITs can turn your TFSA into a monthly paycheque machine for life. Here's how Morguard North American Residential REIT…

Read more »

A plant grows from coins.
Dividend Stocks

The Smartest Dividend-Growth Stocks to Buy With $1,000 Right Now

New dividend-growth investors should consider CN Rail (TSX:CNR) stock and another top play if they're looking to build wealth over…

Read more »

Dividend Stocks

The 3 Top Canadian Stocks to Buy With $1,000 Right Now

If you want consistent income, look to consistent dividend payers. These three stocks are some of the best in the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Want a 6% Average Yield? 3 TSX Stocks to Buy Today

These stocks pay good dividends that should continue to grow.

Read more »

chart reflected in eyeglass lenses
Dividend Stocks

Is Alimentation Couche-Tard Stock a Buy for its 0.9% Dividend Yield?

Couche-Tard stock's small yield is not enticing, but its growth potential could be a wealth creator.

Read more »

Hourglass and stock price chart
Dividend Stocks

5.2% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades!

With its 5.2% dividend yield, Toronto-Dominion Bank (TSX:TD) is a stock I'm eagerly buying.

Read more »