3 absolutely solid stocks to buy before the market collapses again
You may have noticed that the stock market doesn’t seem much in phase with the wave of bad news lately. Surgery of COVID-19 cases. High and persistent unemployment. None of this seems to matter to Wall Street.
What is happening? Investors, as they always do, are looking to the future. They expect COVID-19 cases to decline and jobs to return. However, there will be a big problem if the envisioned sunny future does not materialize.
It’s only a matter of time before stocks come down. Whether that happens in the next few months or not, you’ll want to be prepared. A smart strategy is to invest in stocks of companies designed to survive and thrive for the long term. Here are three absolutely solid stocks to buy before the next stock market crash.
Brookfield Infrastructure: Stable Cash Flow, Dazzling Dividend
Two words come to mind when I think of Brookfield infrastructure (NYSE: BEEP) (NYSE: BIPC): regular and sizzling. The company’s cash flow is as stable as it comes. And its 4.9% dividend yield is downright searing.
There is a good reason for both advantages. Brookfield Infrastructure has infrastructure assets that are making a lot of money month after month. These assets include cell towers, data centers, gas pipelines, ports, toll roads, etc. About 95% of the company’s cash flow is either regulated or contractual. This means that Brookfield can count on money at the door pretty much no matter what is going on with the economy.
Some might think that an infrastructure business is boring. But when times are tough, boredom can be fine. However, Brookfield Infrastructure has produced annualized annual returns among teens since the inception of the company. It’s not boring to me at all.
Of course, Brookfield Infrastructure shares could plummet in another market crash. The important thing to know, however, is that its business will remain strong. Brookfield Infrastructure is strong with a solid rift that is not going to weaken. This is the kind of business you want to own when the market goes haywire.
Dollar General: a winner in good times and bad
Are there any stocks that can perform well when the market goes down? and when it goes up? Yeah. General dollar (NYSE: DG) is a prime example.
The discount retailer becomes even more attractive to consumers during an economic downturn. Buyers appreciate Dollar General’s low prices when they tighten the cords on their purses. The fact that the company’s stores are conveniently located for many Americans also contributes significantly.
If the next stock market crash is linked to the COVID-19 pandemic, Dollar General could be in an even stronger position than it normally would. Its stores offer the basic necessities that consumers need. The stores are also smaller than those of major competitors like Walmart. This is beneficial when customers seek to avoid large crowds to avoid becoming infected with the coronavirus.
Dollar General is also well positioned to prosper during good economic times. This is exactly what happened in the five years leading up to 2020, with the company’s shares soaring 120%. Dollar General is on the verge of success in a post-pandemic world, just like in the pre-pandemic world.
Vertex Pharmaceuticals: the best biotech money you can buy
You might not think of biotechnology stocks as solid as rock. It is true that many biotechnologies are very risky. however, Vertex Pharmaceuticals (NASDAQ: VRTX) is arguably the best biotechnology money can buy today.
Vertex enjoys a monopoly in the market for drugs that treat the underlying cause of cystic fibrosis (CF). No other company is even on the verge of launching a product that would compete with Vertex’s cystic fibrosis drugs. The success of these drugs generated huge profits for Vertex ($ 1.2 billion last year). They have also enabled biotechnology to amass a considerable stock of cash in excess of $ 4 billion.
It’s a safe bet that Vertex’s sales and profits will continue to grow regardless of what happens with the economy or the stock market. Patients will not stop taking their cystic fibrosis medicines. And with the European approval of Kaftrio (which is marketed under the brand name Trikafta in the United States) appearing to be a slam dunk, Vertex could soon see a big jump in sales.
Biotech also plans to expand its market beyond CF. Vertex and partner CRISPR Therapeutics are evaluating a promising candidate targeting rare genetic diseases, beta-thalassemia and sickle cell disease in phase 1/2 clinical studies. Vertex’s pipeline includes other candidates targeting rare genetic diseases and a program targeting pain relief in Phase 2 testing. If any of these investigational drugs are successful, this rock-solid biotechnology could remain the best-of-breed. money can buy for a long time.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.