3 safe stocks to buy in the next bear market

Falling stock prices can be challenging even for experienced investors, but bear markets They’re also where you can find some of the best opportunities to load rock-solid, high-conviction stocks. It’s hard to predict the timing of the next bear market, but it helps to be prepared: have some cash and have a list of stocks to buy on hand. That’s about all you need to turn the next bear market challenge into an opportunity that could eventually help you build a fortune.

Here are three such stocks you’d like to immediately add to your shopping list for the next bear market.

A person holding two stacks of coins, one twice the size of the other.

Image source: Getty Images.

a proven winner

Yes Visa (V -0.97% ) crashes along with the market, you may want to load up on this top fintech stock. Visa operates an asset-light business model: It simply facilitates card-based transactions between consumers, merchants, and financial institutions and earns a fee on each transaction. Make no mistake: those transactions and fees add up to billions of dollars each year. In 2021, Visa processed 164.7 billion transactions worldwide, generated $24.1 billion in revenue and made $12.3 billion in net profit.

Visa has been growing steadily for years, and not just one year. Take a look at this chart and Visa’s impressive growth in revenue, operating income and free cash flow over the past decade.

Chart showing Visa's growth in revenue, operating income and free cash flow since 2014.

Income V (TTM) data by YGraphics

This chart offers just one of the reasons why Visa is the type of stock you’d like to own, even in bear markets. The company is also innovating to keep up with the changing times: it has partnered with multiple crypto platforms, invested in technologies like blockchain, and recently acquired open banking platform Tink. It also offers various value-added services in analytics, data solutions, and risk and security management, among others.

Visa also pays a steady dividend and, in fact, has increased dividends every year since 2008, including a solid 17% increase in 2021. With travel opening up globally, cross-border volumes should pick up and further drive growth. growth of Visa, which makes it a solid company. stocks to buy if it falls in a market correction.

A money multiplier action

Brookfield Infrastructure (WHISTLE 1.46% ) (BIPC -0.69% ) has made patient investors enormously rich over the years, and much of this can be attributed to the company’s strong dividend growth. The thing is, you can rely on Brookfield Infrastructure’s dividend even in a bear market, and the stock is likely to rally quickly if it falls given the company’s fundamentals. This is also a company that believes in looking for opportunities in a recession.

Graph showing Brookfield price increase and total return price since 2012.

BEEP data by YGraphics

Brookfield Infrastructure owns assets in utilities, energy, transportation and data infrastructure. Most of these generate revenue for the company under long-term contracts, which means Brookfield Infrastructure is able to generate steady cash flow even in tough times.

The company typically takes advantage of tough times when companies sell distressed quality assets or simply shed non-core assets to raise funds. For example, last year, Brookfield Infrastructure bought an energy infrastructure company and a utility company, among others. So far, the company’s investment strategy has worked in its favor and it could grow its funds from operations per unit at a compound annual growth rate (CAGR) of 15% between 2009 and 2021. Brookfield Infrastructure’s dividend grew at a CAGR of 10%. during this period.

Backed by the leading group in asset management Brookfield Asset Management it means that Brookfield Infrastructure should never fall short of growth opportunities. Brookfield Infrastructure is targeting long-term 5% to 9% annual dividend growth and a 3.3% yield, which again means consistent dividends you can count on even in the next bear market.

One of the biggest megatrends to invest in

The conflict between Russia and Ukraine has affected various industries in multiple ways, but energy is perhaps one of the few sectors that could feel the long-term repercussions of this war.

The disruption in the supply of fossil fuels has pushed oil and gas prices to multi-year highs and forced several nations to go back to the drawing board in their energy policies. Future energy security is now a priority, and that also means more attention than ever on the need to switch to clean energy.

As it is, the demand for renewable energy has increased rapidly in recent years. In the US alone, solar and wind power accounted for nearly 80% of all electricity generation capacity additions in 2020, up from less than 30% in 2010. Natural gas made up the rest, while coal almost disappeared.

A bar chart showing the addition of electricity capacity in the US by fuel resource type from 2010 to 2021.

NextEra Energy ( NEW -0.92% ) could take full advantage of this global shift towards renewable energy. NextEra owns one of the largest electrical companies in the US. and the largest producer of wind and solar energy in the world. It is also seizing opportunities in another high-potential area: green hydrogen.

NextEra’s adjusted earnings per share (EPS) increased 10% in 2021, and its renewables arm’s contract book grew nearly 25%. The company expects to grow adjusted earnings per share using compound annual rates of 6% to 8% through 2025 and grow dividends per share by nearly 10% each year through 2022. That’s solid passive income you can count on even in a bear market from a stock that should give you solid returns long-term.

This article represents the opinion of the author, who may not agree with the “official” recommendation position of a premium Motley Fool advisory service. We are motley! Questioning an investment thesis, even one of your own, helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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