The worst of the coronavirus is over. At least that’s what the markets say.
Earlier this year, the S&P/TSX Composite Index dramatically lost 40% of its value in a handful of weeks. Today, it’s closing in on a new all-time high.
Of course, the pandemic is far from over.
The World Health Organization recently warned that the COVID-19 crisis will be “one big wave” and cautioned against complacency. The global population growth rate in 2020 could be the lowest in more than 100 years. Fears of a resurgence have kept a tight lid on consumer spending.
Many experts now believe that the COVID-19 downturn will persist for years. Some industries will be permanently smaller, meaning those job losses will become permanent. Under some scenarios, the pain will get even worse.
If you want to protect your portfolio from another bear market, and even have the chance to grow your capital if the COVID-19 crisis worsens, stick with the following two stocks.
Grow no matter what
If you want to sidestep the COVID-19 situation, your best option is to stick with companies that are witnessing long-term secular growth tailwinds. These are growth drivers that will persist for decades, playing out no matter where the economy heads.
The biggest opportunity of all is renewable energy. Over the next century, the world will almost entirely replace its fossil fuel system with cleaner options like wind and solar.
This transition is already underway. Over the last five years, $1.5 trillion was invested in renewable energy projects. Over the next five years, the sum should exceed $5 trillion.
The best way to take advantage is through Brookfield Renewable Partners LP (TSX:BEP.UN)(NYSE:BEP) stock.
With nearly than $50 billion in assets and 5,288 generation facilities, Brookfield is already a global leader in renewable deployments. It owns some of the largest hydro, solar, and wind infrastructure in the world.
Brookfield isn’t new to the game, however. Since 2000, shares have risen by more than 500%. Shares beat the market in every downturn over that period. All the company needs to do is repeat this proven strategy of growth, which should be viable no matter how bad the pandemic gets.
Mitigate the damage
Sometimes, the best offense is a good defense. For that, the clear choice is Canadian Utilities Limited (TSX:CU).
Canadian Utilities is considered a rate-regulated utility. This means regulators dictate how much is can charge its customers. While that may sound bad, when markets tank, it becomes a superpower.
As a utility, Canadian Utilities delivers electricity to its customer base. Electricity demand is remarkably stable. The coronavirus pandemic won’t change that. All of this ensures reliable volumes.
The other side of the equation is pricing. Because regulators set the prices years in advance, short-term economic blips have zero impact on profitability. No matter what happens, Canadian Utilities can continue business as usual.
A testament to this stability is the company’s dividend history. Its raised the payout for nearly 50 years straight. That’s a Canadian record.
Insulate your portfolio from another coronavirus bear market with this stock.
Our favourite coronavirus-proof stocks are below.
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Fool contributor Ryan Vanzo has no position in any stocks mentioned.