The top-notch, blue-chip stocks tend to be resilient and rarely go on sale. They are the best stocks to buy in a market correction when they could be trading at a discount. Investors can target to buy these best Canadian stocks on market corrections of at least 10%.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) has been a superb stock for the last two decades — growing long-term investors’ money by approximately 22% per year, equating to a 55-bagger! That’s difficult to visualize for sure. In dollar terms, an initial investment of $10,000 would have grown to over half-a-million dollars at about $555,218! This included dividend income of approximately $20,292 that more than doubled the initial investment. So, don’t laugh at its puny dividend yield of approximately 0.85%. Its 10-year dividend-growth rate is about 25%.
As demonstrated through its history of excellent execution and capital allocation, the convenience store consolidator has the potential to continue growing at a good clip. Going forward, the company plans to grow through organic efforts and acquisitions. Particularly, management sees fitting acquisition opportunities in the United States and Asia.
At $66.29 per share, analysts think the stock trades at a discount of about 11.5% with the potential to appreciate 13% over the next 12 months.
Canadian National Railway
Like Couche-Tard, Canadian National Railway (TSX:CNR) stock has persistently gone up for the long haul. In the last 20 years, the top Canadian industrial stock delivered market-beating returns of close to 15% per year for its loyal common stockholders.
It might experience a meaningful pullback of 10-20% during recessions. Economists anticipate a mild recession in Canada and the United States this year. So, investors should look out for a potential buy-the-dip opportunity.
At $158.86 per share at writing, analysts think the stock is fairly valued. It also offers a dividend yield of roughly 2%. Notably, CN Rail is a long-term Canadian Dividend Aristocrat with 27 consecutive years of dividend growth. Its 15-year dividend-growth rate is 13.8%. For additional reference, its three-year dividend-growth rate was 10.9%.
RBC stock
Royal Bank of Canada (TSX:RY) is arguably the top Canadian bank stock to own for the long term, particularly, if you seek quality, a diversified business mix, and resiliency. The stock price chart below demonstrates RBC stock has been the most resilient so far during the banking shakeup in the United States.
Its resiliency may be due to its large size and diversified business mix across personal and commercial
banking (40% of its fiscal 2022 revenue), wealth management (30%), capital markets (18%), insurance (7%), investor and treasury services (4%). It also focuses its efforts primarily in Canada (59% of revenue) and the United States (25%).
At $127.22 per share at writing, analysts believe the stock is fairly valued. It also pays a safe dividend yield of over 4.1%.
Investor takeaway
These blue-chip stocks are good for conservative and new investors, as these resilient stocks may be lower risk and more defensive. They rarely go on sale, though. So, aim to buy opportunistically during market-wide corrections of 10-20% if possible.
