Fortis Stocks (TSX: FTS) (NYSE: FTS) have been very resilient in this recession. The defensive stock is only down about 3% from a year ago.
The regulated nature of Fortis’ business makes its results very reliable. Despite its activities in recession, the utility still managed to keep its profits fairly stable. In the first half of the year, earnings per share of Fortis stock fell only around 4% compared to the period of the previous year.
Maintaining a 40-plus year streak of dividend growth through economic cycles and multiple recessions is no small feat. But that’s exactly what Fortis stock has achieved.
With a payout ratio of around 73% this year, Fortis’ return of 3.6% is rock solid. Many conservative investors hold the stock for its sure and growing dividend.
Open text stock
Open text Stock (TSX: OTEX) (NASDAQ: OTEX) fared even better due to the growing nature of its industry. The tech stock is up about 14% from a year ago. It is well positioned to continue to grow, as the information management space in which it operates is growing.
One of Open Text’s recent victories is that the United States National Institutes of Health has chosen its enterprise information management platform, especially for electronic document management and document workflows. , which will improve, among other things, internal processes and records management.
The 12-month average analyst price target is 16% higher from current levels. So the stock is reasonably priced. Besides the price appreciation, investors also receive a growing dividend. The stock offers an initial yield of around 1.6%.
Action Barrick Gold
Barrick Gold The stock (TSX: ABX) (NYSE: GOLD) posted the best performance of the three with a price appreciation of around 59% from a year ago. The gold stock even got a stamp of approval from Warren Buffett Berkshire Hathaway, who started a position in the stock last quarter. This suggests that there is more lead for gold stocks, despite the rally in gold since 2019.
Central banks around the world continue to print money at unprecedented levels, causing fiat currencies to depreciate. Therefore, investing in gold stocks is both defensive and offensive in 2020 and through 2021.
Investing in gold stocks is defensive because shiny metal maintains its value while fiat currencies lose theirs. It is also offensive because the trading performance of gold miners is leveraged on gold prices. Rising gold prices will lead to greater appreciation in the prices of shares of gold miners like Barrick Gold.
Barrick Gold also offers a return close to 1.1%.
The insane takeaway
Fortis, Open Text, and Barrick Gold are three recession-resistant stocks that investors can buy now and be confident to hold during this recession.
Fortis is a staple in conservative portfolios. Open Text is a safe choice for double digit growth. Barrick Gold is a good hedge for a diversified investment portfolio.
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Fool contributor Kay Ng owns shares of Berkshire Hathaway (B shares). The Motley Fool owns shares and recommends Berkshire Hathaway (B shares). The Motley Fool recommends FORTIS INC, Open Text and OPEN TEXT CORP and recommends the following options: January 2021 long calls at $ 200 on Berkshire Hathaway (B shares), January 2021 short put $ 200 on Berkshire Hathaway (B shares) and September short 2020 $ 200 calls on Berkshire Hathaway (B-shares).