If there’s a single word that defines how 2023 has fared in the market, it would be volatile. Market volatility doesn’t always need to be bad; it’s also an opportunity to seek out some stocks at steep discounts. Opportunely, weathering market storms with the right stocks is possible.
Here’s a look at two of those right stocks to consider, which are handily weathering market storms.
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Start with a solid defence
Fortis (TSX:FTS) is a name that should be familiar to most investors. Fortis is one of the largest utilities on the continent with 10 operating regions blanketing Canada, the U.S., and the Caribbean.
But what makes Fortis a great stock for weathering market storms isn’t that impressive portfolio. Instead, what investors should be looking at is Fortis’s lucrative business model.
Utilities generate a reliable source of revenue that is backed by regulated long-term contracts. Those contracts typically span a decade or more in duration, providing a stable revenue stream.
That reliable revenue stream allows Fortis to invest in growth and pay a very handsome dividend. As of the time of writing that dividend works out to an impressive yield of 4.73%. Even better Fortis has an established precedent of providing annual increases to that dividend.
The company has continued that practice for an incredible 51 consecutive years and has plans to continue that tradition.
In other words, Fortis is one of the great stocks for weathering market storms thanks to its reliable revenue, safe dividend, and superb growth. That’s part of the reason why the stock is one of a handful that is still in the black year to date.
As of the time of writing, Fortis is up just over 3% year to date.
Banking on more growth and more income
It would be nearly impossible to compile a list of Canadian dividend stocks weathering market storms without mentioning at least one of Canada’s big banks. The banks offer stable growth, a juicy dividend and perhaps, most importantly, an excellent history weathering market storms better than U.S.-based peers.
The one big bank to consider investing in right now is Bank of Montreal (TSX:BMO). BMO isn’t the largest of the big banks, but it is the oldest. In fact, BMO has been paying out dividends without fail for nearly two centuries. Today, that dividend works out to an impressive 5.41% yield.
This means that investors who drop $30,000 into BMO can expect to generate an income of over $1,600.
BMO’s juicy dividend isn’t the only reason to consider investing in this stellar stock. Apart from its reliable and stable domestic branch segment, BMO also boasts a growing international presence in the U.S.
Earlier this year, BMO completed the acquisition of Bank of the West. The deal adds hundreds of new branches to BMO’s growing U.S. network and expands the bank’s U.S. presence to 32 states.
In short, BMO boasts both long-term growth potential and a stable and growing dividend. This makes it an ideal candidate for weathering market storms.
Oh, and let’s not forget that BMO trades down 12% year to date, making it a great discounted pick to consider.
Weathering market storms can be done, with the right investments
No stock is without risk, and that includes both BMO and Fortis. Fortunately, both stocks offer not only superb growth and income-earning capabilities but also boast significant defensive appeal.
In my opinion, one or both stocks should be core holdings as part of a larger, well-diversified portfolio.
