Stock market sell-offs can be very stressful, especially for new investors who are not used to seeing stocks stumble one day after the next. When the market gets nervous, people start dumping stocks left, right, and center. Most investors don’t even consider that holding onto high-quality stocks through turbulence can be a good idea. This is why market volatility leads to so many opportunities for experienced investors with a long-term investment strategy.
Market downturns cause several blue-chip stocks to trade at significantly lower levels than warranted. Seasoned investors know better than to let fear and uncertainty define their investment decisions. They look at reliable companies with solid track records that offer a rare chance to buy at undervalued levels.
Against this backdrop, we will look at a duo of TSX stocks that might be worth considering for your self-directed portfolio.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS), also called Scotiabank, is an $81.30 billion market-cap giant in the Canadian banking sector. It is one of the Big Six Canadian banks, providing financial products and services to thousands of customers through several business segments. Scotiabank has been one of the most trusted banks in the country for almost two centuries.
The company’s recent strategic shift toward lower-risk markets through its move to reduce some of its exposure to Latin American nations seems like a promising decision. Scotiabank stock is a good investment for dividend-seekers. While dividends aren’t guaranteed, BNS stock investors can certainly think that’s the case. It has paid investors their dividends consistently for several decades and even grown payouts when possible.
As of this writing, Scotiabank stock trades for $65.33 per share. Down by 18.48% from its 52-week high, it boasts an inflated 6.49% dividend yield.
BCE
BCE (TSX:BCE) is a Canadian giant in another industry. The $27.36 billion market-cap company is one of Canada’s largest telecoms. One of the industry’s Big Three in terms of market share, BCE is a wireless and internet service provider. It offers wireless, broadband, TV, and landline phone services throughout the country and has over 10 million customers, accounting for a third of the market. It also has a sizeable media segment that further diversifies its revenue streams.
BCE can be considered a solid buy on the dip, especially due to its future growth potential via its 5G infrastructure. The infrastructure is expensive to build, and BCE had the foresight to get into it earlier than most other Canadian counterparts. This moat provides BCE with the potential to deliver substantial long-term growth to investors through capital gains.
As of this writing, BCE stock trades for $29.99 per share and boasts an inflated 13.30% dividend yield. Down by almost 40% from its 52-week high, it might be a good opportunity for investors who want to buy the dip.
Foolish takeaway
Stock market investing during volatile economic conditions is riskier than usual. However, making careful and calculated decisions can help you take advantage of the economy’s weakness.
Stock markets are cyclical, and history has shown that they recover from downturns and often grow to new heights. Savvier investors have used these periods to increase their positions in high-quality, undervalued stocks and leverage growth through long-term capital gains. While investing in even the most resilient stocks isn’t risk-free, well-informed decisions can give you a greater chance at success.
To this end, Scotiabank stock and BCE stock can be excellent additions to your investment portfolio at current levels.