Written by Amy Legate-Wolfe at The Motley Fool Canada
Seeking Safer Investment Options
When stock markets experience volatility, investors often seek out safer investment options. Certain stocks are more resilient during downturns due to their consistent earnings, solid market position, and essential services. The right safe-haven stock not only helps safeguard a portfolio but can also yield long-term profits as the market recovers. Currently, three TSX stocks are recognized as strong candidates for defensive investments: Waste Connections (TSX:WCN), Cameco (TSX:CCO), and Agnico Eagle Mines (TSX:AEM).
Waste Connections: A Steady Player
Waste Connections operates a waste management business across North America, providing waste collection, transfer, recycling, and disposal services. No matter how the economy fluctuates, the demand for waste services remains constant, making this stock a reliable choice in turbulent markets. The company recently reported revenues of $2.11 billion, surpassing analyst expectations, with earnings per share (EPS) of $1.23. With a market cap of approximately $68.9 billion, its position in the sector is solid.
Cameco: Fueling Future Growth
Cameco stands as one of the largest uranium producers globally and represents a different kind of safe investment. While the energy sector can be unpredictable, the increasing focus on nuclear power as a cleaner energy source enhances Cameco’s growth potential. The company recently recorded revenue of $945 million, exceeding expectations, with an EPS of $0.43 and a market cap around $27 billion. Long-term contracts with utility companies help mitigate short-term uranium price fluctuations, further stabilizing its performance.
Agnico Eagle Mines: Hedge Against Instability
Agnico Eagle Mines is favored by investors seeking to hedge against economic uncertainty, as gold is traditionally viewed as a safe-haven asset. The company runs gold mines in Canada, Finland, and Mexico and has recently posted revenue of $1.84 billion, meeting expectations with an EPS of $0.75 and a market cap of about $35 billion. Its disciplined capital allocation and strong balance sheet distinguish it from other gold miners.
Investment Opportunities Amid Corrections
Market corrections can be challenging, yet they also provide opportunities. Defensive stocks like Waste Connections, Cameco, and Agnico Eagle Mines have consistently demonstrated resilience across various economic cycles, making them excellent contenders for investors looking to navigate turbulent times while positioning for future growth. A diversified portfolio featuring essential services, clean energy, and precious metals can lower overall risk while maintaining potential long-term gains.
Final Thoughts
Those seeking to protect their investments while still pursuing growth might find these safe stocks appealing. Taking advantage of safe-haven stocks during a market correction can lead to a more robust financial standing as markets recover. Investors should continue to investigate these options to enhance their portfolios and ensure stability.
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