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Highlights
- Including some large-cap stocks can help maintain your portfolio from market instability in the long term.
- Large-cap companies are usually established enterprises that have steadied their business over the years and have gained substantial investor trust.
- Generally, conservative investors seeking stable returns and passive income go for large-cap stocks, as they are commonly known to help avoid volatility risk.
Including some large-cap stocks can help maintain your portfolio from market instability in the long term.
Large-cap stocks, as the name suggests, generally belong to experienced companies with a market capitalization of over C$ 10 billion. These companies are usually established enterprises that have steadied their business over the years and have gained substantial investor trust.
Generally, conservative investors seeking stable returns and passive income go for large-cap stocks, as they are commonly known to help avoid volatility risk.
Let us look at two TSX large-cap stocks that seem to be on sale right now.
Algonquin Power & Utilities Corp (TSX: AQN)
Stocks of Algonquin Power & Utilities Corp have slumped by approximately 21 per cent since February 16 last year when it clocked a 52-week high of C$ 22.67.
The utility stock closed at C$ 17.9 apiece on Tuesday, February 8, noting a daily trade volume of 1.4 million.
Also read: BMO & RBC (RY): 2 TSX dividend stocks that can boost your passive income
Algonquin acquired New York American Water Company on January 3 through its 100 per cent owned subsidiary named Liberty Utilities Co. for a purchase consideration of US$ 608 million.
The Oakville-headquartered power and utility company increased its revenue by 40 per cent year-over-year (YoY) to US$ 528.6 million in Q3 FY2021.
The North American utility provider recorded third-quarter adjusted net earnings of US$ 97.6 million in fiscal 2021, up 11 per cent YoY.
The independent power company pays a quarterly dividend (currently US$ 0.171 per share) to its shareholders.
Image source: © 2022 Kalkine Media®
Magna International Inc (TSX: MG)
Stocks of Magna International Inc closed at C$ 102.5 apiece on Tuesday, representing a decline of about 19 per cent from its 52-week high of C$ 126 (June 7, 2021).
The automotive stock grew by about four per cent YoY.
Magna, an Aurora-headquartered company, recorded sales of US$ 7.91 billion and a net income of US$ 11 million in Q3 FY2021.
The electric vehicle (EV) company doles out a quarterly dividend (US$ 0.43 apiece at the time of writing this) to its shareholders.
Bottomline
Large-cap companies are commonly underpinned by robust financials and steady business operations. Some of them are also known to provide steady dividend and dividend growth over the years in general.
Investors should note, however, that even large-cap companies can be impacted by certain market crises.
Also read: Saputo (SAP) & Loblaw (L): 2 TSX stocks for you as milk prices rise
