Written by Jitendra Parashar at The Motley Fool Canada
If you find the ongoing market selloff horrifying, you’re not alone. Rising macroeconomic uncertainties like high inflation, rising geopolitical tensions, and fears of a looming recession are puzzling new and experienced investors alike. However, the market is still filled with lots of buying opportunities in safe stocks that continue to outperform the broader market despite the ongoing macroeconomic concerns.
In this article, I’ll talk about two of the safest Canadian stocks to buy in October 2022 that could continue to yield healthy returns on investments, even in a tough economic environment. Let’s begin.
Boralex (TSX:BLX) is the first one that I want to highlight in my list of safe Canadian stocks to buy in October. It’s a Kingsey Falls-based renewable energy firm with a market cap of about $4.5 billion. The company primarily focuses on operating renewable energy assets, including wind, hydroelectric, solar, and thermal power stations.
Boralex stock currently trades at $43.37 per share with about 25% year-to-date gains, outperforming the broader market by a big margin. By comparison, the TSX Composite Index has witnessed more than 13% value erosion in 2022. This safe Canadian stock also offers a decent annual dividend yield of around 1.5% at the moment.
While this Canadian renewable energy firm already has a 2.4 GW (gigawatt) installed capacity, it’s planning to significantly expand its power generation capacity in the coming years. Boralex aims to reach 4.4 GW capacity by 2025 and expand it further to 10 to 12 GW by 2030 with the help of disciplined organic growth and new quality acquisitions.
Moreover, the demand for renewable energy services is likely to remain strong as more countries across the globe are trying to move away from traditional energy sources to clean energy. Given that, you could expect Boralex’s financial growth to accelerate exponentially in the long run and help its stock keep soaring.
Dollarama (TSX:DOL) could be another great safe stock to buy in Canada in October 2022, as it has an outstanding track record of delivering consistent returns to its investors. This Mont Royal-headquartered value retailer currently has a market cap of $22.9 billion, as its stock trades at $79.01 per share with a 24.8% year-to-date increase.
During tough economic times, consumers try to cut their discretionary expenses and try to save every penny for an uncertain future. This is one of the key reasons why even during an economic slowdown, you could expect the demand for Dollarama’s affordable, everyday items to remain strong. In the July quarter, its revenue growth rate stood firm at 18.2% year over year, higher than 12.4% in the previous quarter. During the quarter, the company’s adjusted earnings grew positively by 37.5% from a year ago to $0.66 per share, despite facing global supply chain disruptions.
Interestingly, Dollarama stock has consistently delivered attractive double-digit yearly returns to investors in nine out of the last 10 years. Apart from its stable business model, Dollarama’s consistently expanding network across Canada could help it accelerate its financial growth further in the long run, making it one of the safest Canadian stocks to buy in October.
The post Market Selloff: 2 of the Safest Canadian Stocks I’d Buy in October 2022 to Hold Forever appeared first on The Motley Fool Canada.
Before you consider Boralex Inc., you'll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in September 2022 ... and Boralex Inc. wasn't on the list.
The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 21 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks * Returns as of 9/14/22