There are so many problems with sitting and hoarding cash rather than investing it. I think the main issue is that when the market is down, investors get scared. They worry they’ll invest in the wrong companies and see their TSX stocks drop into oblivion and never come back.
The thing is, the market always recovers. While there certainly are TSX stocks that could drop and never return, I’m not recommending those today. Instead, we’re looking at two TSX stocks that will recover just as quickly as the TSX. From there, they’re bound for strong future growth in the next year and beyond.
Toronto-Dominion Bank (TSX:TD) is a strong choice among TSX stocks for a few reasons. First off, there’s the fact that it’s one of the Big Six banks. It therefore has provisions for loan losses for this exact occasion, when loans are coming in far weaker before and during a recession.
But it goes beyond this with TD stock. It’s also created a diverse set of revenue streams that are growing all the time. This includes its expansion into the United States, where it remains one of the top 10 banks in the country. While America isn’t doing great now, it’s one of the countries that rebound the fastest post recession. That alone is a great reason.
Yet there’s more as well. TD stock continues to create credit card partnerships, expand in wealth and commercial management, and expand online solutions as well. All this together has created lucrative revenue streams that are only in the beginning of growth.
And with TD stock trading at 9.61 times earnings and down 24% in the last year, it’s a great time to consider its dividend yield at 4.84% before it rebounds.
While TD stock might be the second largest of the Big Six banks, BCE (TSX:BCE) is the largest of the telecommunications companies in Canada. BCE stock should continue to hold this position for years to come at least as well, even if the merger of competitors goes through.
For now, BCE stock has one thing that sets it apart: 5G. The company rolled out its 5G network fast, as well as its wireline fibre-to-the-home network. This has given it the status of the fastest internet provider in the country.
Even during the pandemic and recent downturn, BCE stock manages to continue expanding, rolling out its 5G+ network as well. And given the expansion coming in of wireless and wireline infrastructure, it doesn’t seem this growth will slow down anytime soon.
With shares of BCE stock trading at 20.61 times earnings and down 12% in the last year, it’s also a good time to bring in a whopping 6.47% dividend yield as of writing.
The reason I like these two TSX stocks is because they have proven time and again that while they might fall, they won’t stay down. Now is the time to consider them on the TSX today before a recovery. You’ll get a larger return in the short term and strong long-term growth.
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* Percentages as of 11/29/22
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Fool contributor Amy Legate-Wolfe has positions in Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.