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Resilience is the ability to recover quickly from difficulties — difficulties like a bear market, for example. For a title to have resilience, it must have stood the test of time. He must also have been a consistent creator of shareholder value. During a bear market, there is nothing more valuable than a resilient stock. He can help us through difficult times and ensure that we will emerge victorious.
Without further ado, here are three resilient stocks that make great buys during a bear market.
ECB action: This telecommunications giant can see us going through a bear market
As has been the case with many bear markets before, ECB (TSX:BCE)(NYSE:BCE) is an anchor. It protects shareholders’ money and provides a safe place to hide. Indeed, the telecommunications sector is an essential and highly defensive sector. Therefore, it is not sensitive to economic downturns. This basically means that its revenues, profits and cash flow are predictable and stable.
BCE is also very resilient because it is a leader in its industry. With an unparalleled vast Canadian network, BCE has built a moat. The barriers to entry are high. Thus, it seems that this gap is practically untouchable.
All of this has translated into strong and consistent cash flow and a top-notch balance sheet for BCE. Over the past five years, free cash flow has grown nearly 10% to over $8 billion in 2021. Last quarter, operating cash flow increased 4% to 2.6 billion and free cash flow increased 7% to $1.3 billion. And those strong numbers are matched by BCE’s dividend payouts. In fact, 2021 was the 14th consecutive year of a dividend increase of 5% or more at BCE. Its current dividend yield is 5.7%.
Simply put, BCE has resilience, resilience.
Fortis: a bear market’s best friend
Fortis (TSX:FTS)(NYSE:FTS) is a regulated gas and electric utility company. It is also another high quality defensive stock that is ideal to own during a bear market. Indeed, this defensive activity engenders security and predictability.
These qualities are reflected in the Fortis dividend, which has grown steadily for 48 years. The dividend income from Fortis shares has not only fought inflation, it has also provided more than acceptable returns on investment. It currently has a very generous dividend yield of 3.6%.
Fortis has created shareholder value through different economic cycles and over many years. As a result, its stock price has risen significantly over the long term.
TD Bank illustrates the resilience of the Canadian banking system
What is there to say about Toronto-Dominion Bank (TSX:TD)(NYSE:TD)? This bank has not only survived many crises and bear markets, but it has also thrived. In fact, it has provided shareholders with increasing dividends and returns over time.
Canadian banks have been anchors for Canadian investors for many decades. They are built on a framework of conservatism. The government requires it and, through various regulations, has kept our banking system among the best in the world.
TD Bank thrived under these conditions. In the process, he has been a beacon of resilience for investors. Just look at TD Bank’s long-term stock price chart to see the proof.
Motley Fool: The Basics
So, in closing, the three stocks listed in the article are the best stocks to hold in a bear market. Shares of BCE, Fortis and TD Bank have all shown resilience over the past few decades. It reassures me that these are stocks worth holding when the going gets tough. They are safe places to put money and they also offer stable long-term growth.