Canadian Defensive Stocks TSX
One of the best ways to increase the value of a portfolio of stocks and protect it against adverse market movements is by adding Canadian dividend stocks. Canadian dividend aristocrats provide income in any market environment. Below is a brief excerpt of the top 10 dividend growth stocks and opportunities identified by the Canadian Dividend Stock Screener.
Choosing stock market investment opportunities is often risky if there are several market segments to be wary of, and you should avoid riskier investments. This suggests steering clear of assets that promise stellar growth for the short term, but you fear a significant decline. Yet, from cryptocurrency to the world of electric vehicles, the market is booming.
The post The 2 Best Defensive Canadian Stocks to Buy appeared first on Motley Fool Canada. I discuss why Canadian dividend stocks will continue to deliver wealth gains and protect you from the effects of a sharp correction in the stock market. This month, the 10 best stocks Renowned Canadian investor Iain Butler named the 10 best defensive stocks.
Adding defensive assets to your portfolio is ideal for safeguarding your capital when the stock market undergoes a major correction in the coming years. Therefore, the most important parameter in classifying a defensive stock is its established presence as a reliable market participant.
Companies that have had stable operations for at least a decade can be described as defensive stocks. These companies typically have a high market capitalization, reflecting investor confidence in their operations. Cyclical stocks, on the other hand, often turn out to be high-risk outperformers.
Overall, I am confident that Telus will continue to grow on balance despite the potential downturn and perform well in the current market environment. However, people who need food might be better off with a more defensive name and investing in Telus.
The company has one of the best financial positions of any Canadian REIT, excluding debt and a gross book value of over 40%. Its dividend represents less than 75% of operating cash. The dividend yield is a reasonable 2%, and the company will continue to grow through acquisitions. In my opinion, Telus is a safe holding company that continues to grow and still has an attractive valuation.
The company will invest $3.2 billion over the next three years to expand its regulated utilities. The company’s steady cash flow has enabled it to increase its dividend for the past 49 consecutive years, the longest of any Canadian public company. The company will pay a quarterly dividend of $0.4398 per share, and its forward return is 5%.
The US is the largest market, accounting for 70% of total sales, with Canada accounting for the remaining 30%. The company owns 37 wood processing plants in sixteen United States and five Canadian provinces and a vast distribution network throughout North America.
Quebec retains 70% of the company-owned and franchise-run food and drug markets. However, with the big acquisition of Jean Coutu in 2018, the company entered the pharmacy scene and now has a dominant presence in Quebec’s major grocery stores.
The integrated waste management company has disposal sites close to waste streams, giving it a competitive advantage over other companies. In addition, the company operates in secondary and exclusive markets, enabling it to maintain its margins.
Manulife is a financial company that provides financial advice, insurance, wealth management and asset management solutions to individuals, groups and institutions. The company offers a wide range of financial protection and asset management solutions that meet individual and group clients’ current and future needs. As of March 2018, Manulife had under management $11 trillion in assets, making it one of the world’s largest life insurance companies.
High Liner Foods Incorporated (HLF: 447.92 million dollars, $20.63) High Liner processes, markets, prepares and packages frozen seafood in the United States and Canada. 511.85 million, -6.57%) Corby produces, markets and imports spirits and wine.
Today, CCEP is the world’s largest cola bottler with annual sales of 13.5 billion euros and a total market of more than 600 million consumers in 29 countries.
The acquisition of Coca-Cola Amatil accelerated the company’s sales growth by 25% and gave CCEP access to lucrative markets in Australia and New Zealand. On a per-capita basis, the two companies will sell more than 3 billion cases of products in 2020, 60% of which will come from Coke. By 2025, the company expects the common market to grow from more than 600 million consumers in 29 countries to 13.8 billion euros.
The expansion rate is based on the company’s earnings and cash flow. The company plans to invest in the next five years from $19.6 billion in spending and increase its base rate (CAGR of 6%) to $40.3 billion. In addition to the increase in cash flow, management also plans to increase the dividend by 6%.
The Company will release its fourth quarter and full-year 2021 financial results after the TSX closes today. Analysts believe the stock is currently undervalued at $32 and has an upside potential of 4.2 to 4.7 percent.
Canadian stocks, which are listed on the TSX, have lagged the overall market in recent years. The TSX does not offer many defensive options for the consumer sector, although the sector accounts for about 35% of the Canadian market. Today is a good opportunity to add undervalued defensive consumer stocks like Andrew Peller, Alimentation Couche-Tard, and so on.
The volatility of defensive stocks is determined by their beta coefficient, which remains relatively low. This ability to generate stable returns means that defensive stocks do not experience dramatic leaps in returns when the stock market recovers. The lack of volatility in defensive stocks can be attributed to a constant demand for their products.