What’s better than a few hundred shares of your favourite company? A few hundred more bought at a steep discount making your overall position even more attractively valued. That’s the golden opportunity market crashes offer you.
I almost always take advantage of these crashes to buy more of some of the companies I have in my portfolio. And even if I have limited capital to work with, there are at least three stocks that I will buy more of if the market crashes.
A utility stock
Fortis (TSX:FTS)(NYSE:FTS) is one of the most cherished and coveted dividend stocks in Canada, and the primary reason behind that is its status as a Dividend Aristocrat that’s close to growing its payouts consistently for five decades.
This will earn it the title of Dividend King and add it to the relatively short list of Dividend Kings, though it’s the second Canadian stock to do that (the first is Canadian Utilities).
But its stellar dividend history is not the only thing in favour of this investment. Fortis offers a decent mix of modest growth and a healthy yield, currently at 3.6%. As for the growth, the stock rose over 76% in the last 10 years.
The average growth of 7.6% a year may not match up to pure growth stocks, but it’s enough to keep your savings growing faster than inflation can erode them. And if combined with its reliable dividends, the return potential becomes significantly more prominent.
A bank stock
Bank stocks in Canada have developed a reputation for safety and good dividends, but those are not the only two positives you will add to your portfolio when you invest in National Bank of Canada (TSX:NA). You will also add considerable growth potential, as the smallest of the largest Canadian banks is also one of the top growers of the bunch.
At least, that’s how it has been for the last decade. The bank has seen its share price rise 145% over the previous 10 years, which includes the faster-than-usual post-pandemic growth. Currently, it’s available at a modest 14% discount which has already made it attractively valued and pushed the yield up to 4%. A market crash can swing both numbers more heavily in your favour.
If you buy this stock during a crash, you may lock in a much higher yield and capture an even more attractive value, which may make recovery even more lucrative.
A waste-management stock
Leaders of essential industries almost always in demand are usually reliable investments for capital preservation. But Waste Connections (TSX:WCN)(NYSE:WCN), one of the largest solid-waste management companies in North America, also offers a healthy dose of capital appreciation potential for your portfolio.
The company, with headquarters both in the U.S. and Canada, has an impressive reach in the two countries. It has customers (residential and some commercial) in 41 U.S. states and six Canadian provinces. This reach and an evergreen business model give the company a solid financial edge.
And its organic growth potential is reflected in the stock’s growth as well, as it has risen over 126% in the last five years alone.
Two out of three stocks (Fortis and National Bank) are currently discounted, but it’s nothing compared to the bargains that might emerge from a market crash. And if they are bought during the crash, not only will the value discount help beef up the overall return potential, but it will also make the overall yield more attractive.