2 Safe Stocks to Buy for a Bear Market

A red umbrella stands higher than a crowd of black umbrellas.

Any time the stock market is selling off, and numerous companies are losing value, it naturally makes investors uneasy. Bear markets, in particular, defined as when stock market indices decline at least 20% from their highs, are especially worrying if you haven’t found safe stocks that you can buy.

This is because bear markets and pullbacks in general really only impact higher-risk stocks in a significant way. A high-quality company with solid operations should be able to weather downturns in the economy and, consequently, a pullback in stock prices. And when you can find businesses that will be around for years, if not decades to come, it’s much easier to have confidence in these investments.

A higher-risk stock is a different story. There is a good possibility that many of these lower-quality businesses may not survive a recession or significant bear market.

This is why it’s essential not to let market conditions spook you. Instead, as long as you can find safe stocks to buy and keep a long-term mindset, then there should be nothing to worry about.

So, if you’re looking to add defensive stocks to your portfolio as the market conditions continue to worsen in the short term, here are two safe stocks you can buy today.

One of the top safe stocks to buy for your portfolio today

Investors have plenty of choices when it comes to finding safe and reliable stocks for their portfolios. Utility stocks, in particular, are often extremely reliable, and there are plenty of top utility stocks in Canada.

One of the best to buy now to earn you passive income and keep your capital safe is Algonquin Power and Utilities (TSX:AQN)(NYSE:AQN).

Algonquin is an ideal stock, because it has highly resilient business operations all across the states where it offers utility services such as electricity, gas, and water. Plus, because it’s diversified among several states, it reduces risk considerably.

In addition to these utility operations, though, Algonquin also has a massive pipeline for growth as it also operates an impressive green energy segment, where it owns plenty of renewable energy generating assets.

This makes Algonquin one of the top safe stocks to buy. It pays an incredible dividend, which it increases each year, and has tremendous long-term growth potential. Best of all, though, Algonquin has pulled back recently, albeit not by much, since it’s so resilient. However, you can still buy the stock just off its 52-week low today while it offers a yield of more than 5.75%.

So, if you’re looking for safe stocks to buy for a bear market, Algonquin is a great choice.

A top energy infrastructure stock

Another excellent business to buy for safety and stability today is Enbridge (TSX:ENB)(NYSE:ENB). Enbridge is a business a lot like Algonquin. While the majority of its assets aren’t necessarily regulated by governments, the stock’s operations are so crucial to the North American economy that it’s one of the top safe stocks that you can buy.

Furthermore, in addition to how important Enbridge’s operations are and, therefore, how resilient its business is, the stock is also consistently bringing in billions of cash flow.

This keeps it ultra-safe and ensures that Enbridge can fund its impressive 6.6% dividend, which it has increased for 26 straight years.

In fact, this year, Enbridge is expected to generate at least $5.20 of distributable cash flow per share, yet it will only pay back $3.44 per share in dividend payments, showing just how safe that dividend is and why Enbridge is one of the best stocks you can buy.

So, if you’re looking to shore up your portfolio in this environment and add a high-quality passive-income generator to your portfolio, there’s no question that Enbridge is one of the best stocks you can buy today.

The post 2 Safe Stocks to Buy for a Bear Market appeared first on The Motley Fool Canada.

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See the 5 Stocks
* Returns as of 9/14/22

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Fool contributor Daniel Da Costa has positions in ALGONQUIN POWER AND UTILITIES CORP. and ENBRIDGE INC. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.