JWEL:CC - The Best Recession-Resistant Stocks for Returns and Dividends
2023-10-26 20:00:00 ET
We’re still not in a recession. Not technically, anyway. And while that might be some good news, there are many out there who would have rather just seen the markets crash and burn for a short period. Perhaps then we’d be seeing the market rebound by now.
But such is life, and here we are. In a place where there could still be a recession, and with Canadians wondering what to do next.
So, here are some ways to, at the very least, protect your investments with recession-resistant stocks.
But first, prepare
If you’re worried about the funds you’ve accumulated going up in smoke, meet with your financial advisor. This person will be sure to guide you in the right direction in terms of your goals. Yet there are also a few other things you can do to reduce some stress on your investment portfolio.
First off, consider purchasing both bonds and Guaranteed Investment Certificates (GIC) right now. The bond yield is now, on average, 5% on a five-year loan. That’s massive . You’re therefore gaining 5% of your investment, guaranteed, by either the government, a business, or your banking institution.
This doesn’t happen all the time, which is why it’s a great time to lock in these rates while you can — at least in part. Then you can look for strong returns and dividends from these recession-resistant stocks.
Manulife
If you’re going to look for recession resistance, then consider insurance and asset management firms. A great option is Manulife Financial ( TSX:MFC ). Manulife stock is an excellent option here, as it provides financial services around the world.
The company has brought in both stable earnings and strong cash flow, and it continues to grow and thrive and expand. As it grows, it diversifies. As it diversifies, it creates a lower risk profile. In fact, by 2025, the company aims to achieve 75% contribution to the business from high-potential businesses and 15% to long-term care insurance.
Much of this will focus on its Asia business, with strong growth expected in this area. Furthermore, Manulife stock has remained focused on reducing expenses, achieving a target of $1 billion in expense savings, all ahead of schedule. Add in that rising interest rates should be beneficial in the near term, and Manulife stock looks like a stellar choice right now.
Shares trade at 3.57 times earnings, and Manulife stock holds a 6.11% dividend yield. Shares are up 8% in the last year.
Jamieson Wellness
Another strong option among recession-resistant stocks is healthcare companies, but not necessarily those creating the next big thing. Instead, companies like Jamieson Wellness ( TSX:JWEL ) are strong, diversified options that provide products Canadians need, no matter what.
Whether it’s your daily vitamin, a nutritional supplement, or sleep issues, Jamieson stock has Canadians covered. This is why earnings have remained at least near estimates during the last few reports.
In fact, recent earnings showed that revenue increased by over 50%. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also jumped by 27% year over year. What’s more, the company is also interested in Asia, building out its own model in China for future growth.
As the company continues to maintain their full-year growth expectations across the world, it now sees revenue increase by between 26% and 28% year over year, with adjusted EBITDA between 16% and 18%. This would mean further growth, with even more to come as it expands in China.
The stock trades at 20.68 times earnings as of writing, with the stock offering a 3.26% dividend yield. Shares are down 30% in the last year.
The post The Best Recession-Resistant Stocks for Returns and Dividends appeared first on The Motley Fool Canada .
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
2023