Worried About the Stock Market? These 3 Cheap Stocks Are Safe as Milk!

Safe, cheap stocks can allay worries about the stock market, especially amongst rising recession fears in Canada.

| More on:

Worrying about the market is the default state of mind for most investors. Even in a healthy market, the fear that it might take a turn for the worst is always there. Recessions or a market crash are extreme scenarios, but even a long, bearish market can slowly erode your investments.

In their fears, many investors look for expensive, blue-chip stocks, but there are several cheap stocks that can be quite safe, long-term holdings.

A safe dividend stock

Timbercreek Financial (TSX:TF) is a good potential pick if you are looking for a cheap and safe dividend stock. The stock is currently trading at just $7.80 per share, courtesy of a 21% discount from its 2021 peak, and offering a mouthwatering 8.8% dividend yield. TF shares have started a rapid recovery, so the yield might not remain as attractive for long.

The payout ratio, while not in safe territory, is better than last year, and the company’s history has been quite consistent regarding dividends. At its current yield, the stock can help you start a $220 per month dividend income if you invest $30,000 in it.

As a financial solution provider to real estate clients, TF stock may be vulnerable to the current state of real estate in the country. However, its lean towards the commercial sector partially shields it from the full impact.

A safe growth stock

StorageVault Canada (TSX:SVI) operates in a specific real estate niche – storage spaces. As a leader in this market segment, the company has a certain moat. It’s trading at $6.20 per share and, in the five years, has appreciated over 150% in the last five years. The growth hasn’t been very consistent, but the trend has mostly been upward since 2014.

It’s also a dividend payer, but the yield is less attractive than the growth potential of the company. This stock’s safety comes from its leadership status in its specific market niche and business model itself.

The portfolio of properties is massive, and it has achieved exceptional growth in its revenue year over year. There are eight individual brands under the StorageVault banner.

A safe green stock

If you are looking for a beaten-down stock that might still be considered a safe pick and may have good potential for growth in the right market conditions, Ballard Power Systems (TSX:BLDP) is worth a look. It’s a leader in fuel cell technology solutions, a promising niche heavily reliant on the successful and financially feasible extraction of hydrogen.

BLDP stock experienced tremendous growth between 2018 and 2021, over 1,300%. In the correction phase, the stock fell well over 80%, and though it languished in that slump for quite a while, BLDP has started showing signs of upward momentum. It has grown 24% (so far) this year alone.

Foolish takeaway

These stocks are cheap, a step above penny stocks, but they offer safety on par with many of their more expensive counterparts. The safety mainly comes from underlying business stability and growth potential in a healthy market and, for two of the three companies (Ballard and StorageVault), the leadership status in their respective industries.  

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Train cars pass over trestle bridge in the mountains
Dividend Stocks

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

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Invest Your $7,000 TFSA Contribution in 2024

Here's how I would prioritize a $7,000 TFSA contribution for growth and income.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

A Dividend Giant I’d Buy Over Enbridge Stock Right Now

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »