It’s become incredibly clear to analysts that a recession is heading to Canada, the only question is when. While this recession certainly won’t be as bad as the last, it’s still best to prepare. In fact, the markets have been putting up warning signs all over the place for investors to juggle around their investments.
Analysts expect this recession to follow after a series of dips in the market, which I’m sure you’ve already noticed has happened at least a few times since the end of 2018. While there could be more dips, a greater one that lasts longer would mark the recession itself, but we’re not there quite yet.
To protect yourself, I would consider adding a few stocks that are could help protect you from this market volatility.
Fortis Inc. (TSX:FTS)(NYSE:FTS) hasn’t just beaten the market since the beginning of the year, the stock has soared to all-time highs as investors realize this could be the stock that saves them during a market downturn.
That’s because Fortis is a utilities company with an incredibly predictable cash flow that would continue even during a market downturn. In fact, while other areas of the economy are hoarding cash, Fortis has been in growth mode and increasing its already strong dividend of 3.45% as of writing.
While the company has been growing through acquisition, it expects organic growth to lead the charge in the next few years. The company expects compound annual growth of 7.2% in the next five years, with its EBITDA to increase by 12.5% in the next two years.
Another great place to hide out during the recession is in the banking industry. I know, this sounds counter-intuitive; however, Canadian banks have performed as some of the best in the world during and immediately after a recession.
If you’re going to consider any right now, I would consider Toronto-Dominion Bank (TSX:TD)(NYSE:TD).
TD has been expanding south of the border at a rapid rate, becoming one of the country’s top 10 banks. Yet it’s only set up in the northeast at the moment, making expansion throughout the country almost a given.
As well, the bank has entered the highly lucrative area of wealth and commercial management. Both of these areas have already increased the company’s revenue stream, with analysts putting the stock’s fair value at around $80 per share, leaving the potential for incredible growth both now and in the future, with a solid 3.94% dividend yield while you wait.
Finally, we have another company that’s been a diamond in a rough industry. TC Energy Corp. (TSX:TRP)(NYSE:TRP) has been on strong and steady upward trajectory since the beginning of the year, while others in the pipeline industry have been going up and down like a yo-yo. But TC Energy has one thing going for it that the other pipeline companies don’t: Keystone XL.
Now that TC Energy has Keystone XL pipeline under its belt, with expected completion sometime in 2021, investors can rest assured that earnings and revenue will continue to be strong for some time.
Beyond Keystone, the company has a total of $45 billion in capital growth projects for investors to look forward to, which should keep TC Energy’s stock continuing upward for some time.
Meanwhile, the company has also managed strong and stable dividend growth to 4.54% today, and expects to continue that growth by 8-10% through 2021.
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Fool contributor Amy Legate-Wolfe owns shares of TORONTO-DOMINION BANK.
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