The coronavirus selloff has wreaked havoc on investors’ portfolios. But throughout this, we have seen some standouts that are outperforming. TC Energy (TSX:TRP)(NYSE:TRP), for example, has massively outperformed the market in March and year to date.
TC Energy is a dividend stock that offers investors many characteristics that we should be looking for in today’s difficult markets. This is why the stock has outperformed so massively year to date.
A dividend stock that is massively outperforming the market in this coronavirus selloff
I think it would be fair to say that even before this all started, many of us were expecting a selloff in the markets that had continued to flirt with all-time highs. But nobody expected this coronavirus selloff. So, this has become the new reality of wealth destruction. In this environment, the importance of finding the outperformers is even more pronounced. Thankfully, we do have some standouts. We are seeing bright spots that are offering investors somewhat of a shelter.
Bright spots such as TC Energy. TC Energy stock price lost 10.6% of its value in March, which is not great, of course. But this significantly outperformed the S&P/TSX Composite Index, which lost 17.7%. Year to date, TC Energy fell 9.6%, while the TSX Composite Index fell 21.6%. That’s certainly a pretty impressive outperformance.
TC Energy stock weathers the coronavirus selloff with its highly visible business
TC Energy’s business is an essential one. Its assets include 93,300 kilometres of natural gas pipelines, 4,900 kilometres of oil pipelines, gas storage, and 6,000 megawatts of power generation. This strategic footprint is invaluable, offering a lifeline today with strong growth prospects for tomorrow.
TC Energy’s business is a highly defensive and visible one. This is because 90-95% of TC Energy’s EBITDA is regulated or under contract. This results in a utility-like stock, and as we know, utility stocks are famous for their predictability and security. All of this means that it is highly unlikely that the dividend will be cut. And the dividend income is a big part of the story of TC Energy. With its dividend yield of 5.5% today, investors get a pretty low risk and generous return with dividend income alone.
With a well-managed debt balance and a self-funded capital-expenditure model, I see TC Energy stock as increasingly attractive today. To top this all off, the dividend yield of 5.5% should provide added comfort to investors.
Foolish bottom line
So far, the coronavirus selloff has resulted in 2020 being a year of huge wealth destruction anyway you look at it. Today, I am here to tell you that it is time to look ahead. Stock markets trade based on outlooks, not based on the past. It seems pretty clear that the markets are pricing in much of the bad news. So now, despite the continued uncertainty, let’s look to the stocks that will be best suited for investors to make some huge gains when this is all over.
TC Energy stock price is trading at levels that appear to be discounting more bad news than will actually materialize for the company. Yes, the shutdown due to the coronavirus will have broad, far-reaching negative consequences. Yes, investors are in for continued volatility. And yes, a lot of wealth may continue to be lost. But at the end of the day, it is companies like TC Energy that will lead us out of this crisis. When that time comes, we would all be grateful if we reached for TC Energy stock today.
Many investors fear market crashes. However, long-term investors should embrace this crash, because bear markets can potentially allow you to make millions. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
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Fool contributor Karen Thomas owns shares of TRANSCANADA CORP.
Bombardier to lay off 2,500 aviation workers amid COVID-19 struggles – CBC.ca
Bombardier will lay off 2,500 aviation workers throughout the year as the company struggles to keep its operations afloat during the COVID-19 pandemic.
In a release Friday morning the Quebec-based transportation company said it is expecting to see a 30 per cent year-over-year loss in business jet sales, forcing it to reduce its workforce.
In a statement to Radio-Canada Friday, the company said 1,500 of the layoffs will be in its Quebec facilities and 400 in Ontario, with the rest of the layoffs in its international facilities.
“These are permanent layoffs,” the company confirmed in a statement.
Bombardier paused all operations in March in an effort to protect employees from the spread of the novel coronavirus.
It gradually resumed operations again last month, but had already reported a loss of $200 million US in its first quarter.
The layoffs are just the latest in a series of struggles for the aerospace giant.
In February, Bombardier exited the commercial plane business, selling its remaining stake in the A220 program to Airbus, in an effort to pay off a multibillion-dollar debt.
That same month, the company also sold its rail-building unit to French train giant Alstom SA, marking its exit from the rail business.
More to come.
History Suggests Record 50-Day Stock Market Rally May Be Just The Beginning – Benzinga
The S&P 500 has gained a record 39.6% since it hit its 2020 low back on March 23. Not only has that rally erased much of the year’s COVID-19-related losses, it’s also the best 50-day stretch in the history of the market.
After such a strong rally, traders are understandably getting uneasy the market is overbought and due for a pullback. However, from a purely historical perspective, the strongest 50-day periods have generally led to even more gains over the year that follows, according to LPL Financial Senior Market Strategist Ryan Detrick.
A Closer Look
On Thursday, Detrick looked at the seven other times since the S&P 500 was constructed in 1957 that the index has gained at least 20% over a 50-day period. In all seven instances, the index gained at least another 5.2% in the year that followed.
“Big 50-day rallies in the past have taken place near the start of new bull markets, and the returns going out a year were quite bullish,” Detrick wrote.
LPL found that the S&P 500 averaged a 1.1% gain over the month following the best 50-day stretches. The S&P 500 has averaged a 6.2% gain over three months, a 9.1% gain over six months and a 19.4% gain over the year following these exceptional 50-day stretches.
Detrick said traders are right to be concerned about the durability of the rally in the near-term given potential red flags in the put-to-call ratios among option traders. However, history suggests the next six months to a year could be very kind to investors overall.
It’s difficult to step in and chase the SPDR S&P 500 ETF Trust (NYSE: SPY) today after the market has had its best 50 days in history. However, LPL’s research suggests long-term investors with dry powder should consider scooping up S&P 500 stocks on any near-term pullbacks.
Do you agree with this take? Email firstname.lastname@example.org with your thoughts.
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Bombardier to lay off nearly 200 regional rail workers in GTA – BNNBloomberg.ca
Bombardier Inc. says it will temporarily lay off 196 employees working on regional transit services in the Greater Toronto Area due to a steep decline in ridership numbers amid the COVID-19 pandemic.
The company said in an email the job cuts, effective June 21, amount to about 20 per cent of its workforce at GO Transit and the Union Pearson Express.
Both rail services are owned by the Metrolinx transit agency, which contracts out operations to Bombardier.
Bombardier says ridership has dropped by 90 per cent due to the impact of the pandemic, prompting a reduction in service levels.
Commuting has plummeted as confinement measures shuttered businesses, triggered layoffs and prompted work-from-home policies.
Air passenger numbers have also plunged, with international traveller volumes falling 98 per cent year over year at Canadian airports last week, according to the Canada Border Services Agency.
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