Therefore, I think investors should take a more defensive approach to preserve the value of their portfolio. For those looking to do that, here are two defensive games to consider buying right now.
Royal Bank of Canada
For investors looking to add defensiveness to their portfolio, I think Royal Bank of Canada (TSX: RY) (NYSE: RY) is a great option. Indeed, this banking monster has been on my watch list for quite some time. The Toronto-based company has a prudent business model with very diversified operations.
In addition to Royal Bank’s personal and business lending segments, the company’s wealth management and insurance divisions also contribute significantly to its earnings. In addition, JD Power ranks Royal Bank as the highest rated major bank in Canada this year for the second time in a row based on customer satisfaction. This is remarkable, given that the satisfaction of customers in the financial sector was impacted during the pandemic.
Along with having a great business model, this company has top notch fundamentals. Indeed, its EPS growth and reliable dividend income certainly looks attractive to investors today. Despite the crisis induced by the pandemic, the Royal Bank has declared high margins. In addition, Royal Bank’s capital ratios suggest that this bank has a strong liquidity position.
At the time of writing, this stock has a valuation multiple of 15 times earnings and an attractive dividend yield of 3.5%. This stock is an ideal option for conservative investors looking for long-term participation.
In my opinion, Fortis (TSX: FTS) (NYSE: FTS) is currently one of the safest options on the market. Indeed, this company is well ahead of its peers when it comes to dividend growth. Few companies can compete with Fortis’ track record for dividend growth. After all, he has been increasing his dividend every year for almost 50 years.
In addition, Fortis offers great stability to investors. This company has secured favorable long-term contracts for its core utility business. As a result, Fortis systematically generates cash flows which it invests in the operations of the company or pays out in the form of a dividend. At the time of writing, this stock has a dividend yield of 3.7%, which is quite attractive given its history of dividend growth.
Even in this heavily inflated market, it looks like Fortis will be able to generate double-digit returns over the long term. Therefore, he continues to be one of my top defensive picks on the TSX today.
Looking for other defensive gems? Here are some actions to consider now:
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Silly contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.