3 Stocks to Buy and Hold Through Any Market Storm

The S&P 500 index (^GSPC +0.29%) has been incredibly resilient amid considerable uncertainty. It is trading near all-time highs despite the geopolitical conflict in the Middle East, the resulting high energy prices, and the potential for energy costs to lead to a global recession. It is completely reasonable for investors to be concerned that Wall Street is about to get hit by a material storm.

If that’s the lingering fear in the back of your mind, you might want to consider buying companies like Enbridge (ENB 1.06%), Procter & Gamble (PG +0.12%), and Realty Income (O 0.67%). Here’s why.

Enbridge: Energy exposure with a safer twist

Enbridge is an energy company, but commodity prices aren’t the driver of its financial performance. This is because the majority of its energy revenues are derived from the fees energy companies pay to use Enbridge’s oil and natural gas pipelines. The volume moving through the Canadian energy giant’s infrastructure system is more important than the price of those commodities. Given the importance of energy to the global economy, demand tends to remain strong regardless of oil prices.

However, Enbridge’s story doesn’t stop there. It also owns regulated natural gas utilities and clean energy assets. Like the pipeline business, these two business segments generate reliable cash flows. They also provide important diversification, noting that Enbridge’s goal is to provide the world with the energy it needs. Its push beyond pipelines is the proof that it is living up to that goal. The big reason to buy it, however, is the well supported 5.3% dividend yield backed by 31 annual dividend increases, in Canadian dollars.

If you are worried about the energy sector, Enbridge is a great way to maintain your exposure while toning down your risk.

Procter & Gamble: You won’t stop buying

Procter & Gamble is one of the world’s largest consumer staples companies. It makes products like toilet paper, toothpaste, and deodorant. The stock market could fall into a deep bear market, and you will continue to buy these items. The economy could dip into a recession, and you will continue to buy P&G’s products. There is an inherent resilience to its business.

That fact is highlighted by P&G’s status as a Dividend King. It has rewarded investors with over five decades’ worth of annual dividend increases. The company can stand toe-to-toe with any of its peers as a business. However, a key differentiator is its focus on using innovation to drive growth. That allows the company to charge more for its products and to expand the size of the categories in which it competes.

P&G’s dividend yield is 2.9%, well above the market’s 1.1%. And the company’s price-to-sales, price-to-earnings, and price-to-book ratios are all slightly below their five-year averages. The stock isn’t cheap, but a fair price for a well-run and resilient business is a good opportunity for long-term investors worried about the lofty levels of the market.

Realty Income: Slow, steady, and time-tested

Last up is Realty Income, the largest net-lease real estate investment trust (REIT). A net lease requires the tenant to pay for most property-level operating costs. It is a fairly low-risk approach in the sector when spread across a large portfolio. Realty Income owns over 15,500 properties.

The REIT’s properties are spread across North America and Europe, with a focus on retail assets. That said, it also owns industrial buildings and some more unique properties, such as casinos and data centers. The real story here, however, is how resilient the portfolio is to adversity. Even during the Great Recession, occupancy didn’t fall below 96%. Realty Income is built to survive, which should attract conservative investors.

The REIT’s yield is an attractive 5.1%. The monthly pay dividend has been increased annually for 31 years. This is a slow-and-steady business that even the most risk-averse investors can count on as a dividend cornerstone.

Think about the long term

If you are concerned about the market, don’t just sit there and hope for the best. Start looking for companies you believe can survive a market storm. Enbridge is a great option in the energy patch. Procter & Gamble is a consumer staples giant with a proven dividend track record. And Realty Income is a boring high-yield stock that easily survived the last deep recession.