There are a lot of daring investors who are always on the lookout for the next best thing. This requires them to take necessary and, sometimes, unnecessary risks. A more conservative strategy is to stick to the proper defensive stocks and hold them sufficiently long. And if you are looking for stable, low-volatility stocks, three are worth looking into right now.
Source: Getty Images
A utility company
Utility businesses are among the most characteristic defensive investments. However, some utility stocks stand out even among the rest of the relatively safe sector, and Fortis (TSX:FTS) is one of them. It’s a utility giant with ten regulated utility operations in multiple countries. It offers both electricity and natural gas utilities and has a total of over 3.5 million customers.
This geographical and operational diversity are just two of the things that make the company safer beyond the business model. Another is the nature of its assets. About 99% of the assets the company holds are regulated, which means significant consistency in its revenue stream. It’s not a great pick from a growth perspective, but it’s one of the best dividend stocks you can buy.
The current yield is at 4%, and the stock is ready to become the second Dividend King of Canada, with 50 years of consecutive dividend growth, a feat only achieved by one other company (in Canada) so far.
A waste management company
Waste Connections (TSX:WCN) is technically not qualified as a utility company, but it might as well be, considering the importance of the service it provides. Waste management is a critical service for almost every household and business and Waste Connections does it on a massive scale. It has about nine million customers in 44 states in the U.S. and six provinces in Canada.
The company caters to the waste management needs of residential, commercial, and industrial customers. It also has over 80 recycling operations, making it a solid pick from an environmental, social, and governance investment perspective.
Waste Connection has a solid dividend history as well, but its yield is too low for its purchase to be a dividend-oriented decision. The main reason to consider this defensive stock is its powerful growth potential. It has risen by about 112% in the last five years alone.
A railway company
Canadian National Railway (TSX:CNR) is the most valuable railway company in the country and one of the largest companies in the country by market cap. It also has a massive railway network connecting three different coasts in North America.
This makes it a powerful logistics player in the region. The railway is responsible for hauling a sizable segment of various Canadian outputs, including minerals and agricultural products.
Companies like this are part of a country’s economic backbone. It has even augmented its logistical position by developing a sizable trucking fleet.
Canadian National Railway is a trusted dividend aristocrat with 27 consecutive years of dividend growth and is currently offering a 2.1% yield. Its capital-appreciation potential is also quite decent and it rose by about 97% in the last decade.
Foolish takeaway
The three blue-chip stocks offer a promising mix of safety, dividends, and capital-appreciation potential. They represent businesses that are expected to remain viable for decades and have significant growth opportunities at their disposal. Buying them now and holding them long term can help you build a solid nest egg.
