Market Crash 2020 Alert: 3 Top TSX Picks That Will Go Through the Roof

When will the next market crash occur and which stock picks should you keep an eye on? Here’s my analysis on both topics, including my picks: Waste Connections (TSX:WCN)(NYSE:WCN), Brookfield Renewables (TSX:BEP.UN) and BRP Inc. (TSX:DOO).

| More on:
Paper airplanes flying on blue sky with form of growing graph

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn moresdf

I continue to hold the perspective that we’re due for another leg down in equity markets this year. I don’t think the stock market is fully pricing in earnings weakness. I think as we see third and fourth quarter results come in, a marked shift in consumer sentiment will take hold.

As such, 2021 could be a make-or-break year for investors. Here are three picks I’d hold off on buying until 2021 (at the earliest). In other words, don’t be too eager to buy these names.

Waste Connections

A leader in North American garbage collection services, Waste Connections (TSX:WCN)(NYSE:WCN) is, in many ways, the highest quality company in its sector. Waste Connections has the best margins of its peers. The company has grown its network both organically and via acquisition in recent years, posting a very respectably growth rate for investors.

The recent earnings reported by Waste Connections showed earnings and cash flow strength, indicating consumers have qualified the essential nature of the services this company provides.

I think we’re about to see more broad equity market weakness on the horizon. I’d therefore hesitate to recommend buying Waste Connections stock at this level. While this stock is high quality, it certainly isn’t cheap. Entry point does matter. That said, having this stock on your shopping list is always a good idea, particularly if it goes on sale.

Brookfield Renewables

Any Environmental, Social, and Governance (ESG) play seems to be a pretty safe pick. I don’t see investor interest for renewables waning any time soon. Brookfield Renewable Partners (TSX:BEP.UN) is a great pick for a “2021 and beyond” time frame. This Brookfield subsidiary holds a portfolio of high-quality renewable power assets which will only increase in value over time.

The company’s mid-single digit dividend yield is attractive.  Moreover, it’s likely to grow in line with earnings over the long-term. This is a great long-term stock to buy and hold. Make sure you update your watch list with this gem.

BRP Inc.

Should we see another leg down in the stock market, companies like BRP Inc. (TSX:DOO) could get hit pretty hard. Any company that is highly correlated to overall economic performance and discretionary consumer spending is likely to be punished in the near-term, should volatility pick up again.

That said, such companies do tend to rebound the most from such declines. Coming out of a recession, stocks like BRP are the ones to own. I’d highly recommend adding this stock to your watch list for now and checking in on the company periodically.

If the conditions are just right, highly cyclical stocks like this can outperform for years, as we saw with this previous decade-long bull market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned.

More on Dividend Stocks

growing plant shoots on stacked coins
Dividend Stocks

5 Dividend Stocks to Buy With Yields Upwards of 5%

These five companies all earn tonnes of cash flow, making them some of the best long-term dividend stocks you can…

Read more »

funds, money, nest egg
Dividend Stocks

TFSA Investors: 3 Stocks to Start Building an Influx of Passive Income

A TFSA is the ideal registered account for passive income, as it doesn't weigh down your tax bill, and any…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

3 of the Safest Dividend Stocks in Canada

Royal Bank of Canada stock is one of the safest TSX dividend stocks to buy. So is CT REIT and…

Read more »

Growing plant shoots on coins
Dividend Stocks

1 of the Top Canadian Growth Stocks to Buy in February 2023

Many top Canadian growth stocks represent strong underlying businesses, healthy financials, and organic growth opportunities.

Read more »

stock research, analyze data
Dividend Stocks

Wherever the Market Goes, I’m Buying These 3 TSX Stocks

Here are three TSX stocks that could outperform irrespective of the market direction.

Read more »

woman data analyze
Dividend Stocks

1 Oversold Dividend Stock (Yielding 6.5%) to Buy This Month

Here's why SmartCentres REIT (TSX:SRU.UN) is one top dividend stock that long-term investors should consider in this current market.

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Dividend Stocks

Better TFSA Buy: Enbridge Stock or Bank of Nova Scotia

Enbridge and Bank of Nova Scotia offer high yields for TFSA investors seeking passive income. Is one stock now undervalued?

Read more »

Golden crown on a red velvet background
Dividend Stocks

2 Top Stocks Just Became Canadian Dividend Aristocrats

These two top Canadian Dividend Aristocrats stocks are reliable companies with impressive long-term growth potential.

Read more »