Kalkine Media -
The likelihood of a recession is rising daily. Risky assets were affected by inflation and rate increases last year, but 2023 is predicted to be worse. A probable recession and the banking crisis could increase market volatility.Highlights
- 58% of economists still think there is a greater than 50% chance of a slump over the next 12 months.
- The S&P/TSX Capped Utilities Index gained five per cent month-to-date (MTD).
- In 2022, Enbridge's cash provided by operating activities amounted to C$ 11.2 billion.
The National Association of Business Economics surveyed 48 forecasters, and the results show that 58% of economists still think there is a greater than 50% chance of a slump over the next 12 months.
Defensives appear to be worth exploring for stock market enthusiasts this year. In 2023, big businesses, less volatile, passive income-generating companies, can be put on a watchlist. These two TSX stocks could provide tremendous portfolio stability during a recession.
Fortis Inc . (TSX: TSX:FTS) Amid the recent upheaval, utility stock prices have already begun to rise. One of the defensive names is Fortis, a leading utility stock from Canada. Generally, the defensive sector performs well in declining markets due to its poor correlation with broad market indices.
The S&P/TSX Capped Utilities Index gained five per cent month-to-date (MTD) and 5.5 per cent year-to-date (YTD).
Fortis' extensive, tightly controlled operations help to provide earnings stability. Utility firms like Fortis may continue to see constant demand for its services even when the economy is struggling due to the necessity of electricity and gas.
The company announced to distribute of a quarterly dividend of C$ 0.565 per share, payable on June 1. As of writing, the dividend yield was 3.9 per cent.
Enbridge Inc. (TSX: TSX:ENB) Enbridge (TSX:ENB), an energy midstream firm, can be explored as a defensive stock for an impending recession.
The fluctuating price of oil and gas does not significantly affect Enbridge's profits. They are mostly motivated by long-term contracts, which explains this.
Due to its low-risk, fundamentally sound business, Enbridge is anticipated to continue growing steadily despite a recession.
In 2022, Enbridge's cash provided by operating activities amounted to C$ 11.2 billion, reflecting a significant surge from C$ 9.3 billion in 2021.
Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.