The rising unemployment rate has put the Canadian economy amid a recession. There has been a fall in the gross domestic product figure since the emergence of the COVID-19 pandemic, which has caused havoc globally. The pandemic has made businesses collapse as consumers’ are now spending less.
Earlier in the year, the markets plummeted over 35%. The V-shaped recovery has come as a shock to many investors. The stock market and the economy have been in a crisis. This means that investors should be prepared for another market crash.
Investors have been nervous as the Warren Buffet indicator shows that the South markets have been overvalued by 75%. However, it has proved to be imposable to time the market investors could still buy recession-proof stocks.
The Canadian Utility Giant
This is one of the top Canadian stocks that pay dividends to Fortis (TSX: FTS) (NYSE: FTS). The Canadian utility giant is considered to be recession proof s as it has regulated business rates. Fortis managed to rise after a 52-week fall earlier in the year but has come up to gain a 25% increase. It has therefore remained to be the top defensive stock to buy.
Fortis is Canada’s largest utility company. The company’s focus is on electricity supply. Fortis supplies electricity to five Canadian provinces, three Caribbean countries, and nine states i9n the United Striates. The company reported a total earning of $274 million in the second quarter of 2020. The company also recorded $4.8 billion in unutilized credit facilities. Fortis increase in dividend payout has come as a result of their investment in capital expenditure. The company has achieved this for the last four decades.
The Renewable Stalwart
Another recession-proof stock that you should consider investing with is Brookfield Renewable Partners. The company, since it came public in 2000, has generated 18% annual returns. This has made them outpace the border markets easily.
Brookfield focuses on the utility-scale generation of renewable energy sources and also operates them. The company owns solar power generating facilities, hydroelectric, and wind; they have diversified their operations to Asia, America, and Europe. Renewable energy is a long-term investment allowing Brookline Renewable to generate stable cash flow.
Divided Aristocrat
This is the third company in the list of Canadian Utilities. The company has a forward yield of 5.4%. The company has had increased dividends for over four consecutive decades and also has predictable earnings.
The company generates all of its income from regulated operations covering 95% and 5% from long-term contracts. This ensures that the dividends pay are stable even on challenging economic moments. Therefore if you invest in the company, you are assured of generating a profit on your dividends payment.
Anyone willing to invest in the Canadian stock market should not hesitate to invest in these stock companies. Investing with these three top companies will make sure your investment is secure to avoid losses.
