Keep Your Mind on Your Money in 2020 With These 2 Awesome Stocks

Christopher Liew, CFA
A close up image of Canadian $20 Dollar bills

Investing brings rewards, but you should readily accept that it also comes with risks. Stocks generally have the potential to deliver higher returns over time, although values change due to daily fluctuations. Hence, a systemic approach is to pick stocks that can somehow shield your money from risks or market volatility.

If you don’t already own Fortis (TSX:FTS)(NYSE:FTS) or Emera (TSX:EMA), you can add the two awesome stocks to your 2020 portfolio. You can make money in two ways from both: through dividends and price appreciation. The businesses are low risk and they offer capital protection.

Best of the lot

Fortis is a top-tier utility stock that is ideal for individuals with low risk tolerance. Who wouldn’t be attracted to a stock that has delivered a total return of 1,428.29% for the past 20 years? With its impressive performance, you can adopt a buy-and-hold approach when it comes to Fortis.

The $20 billion company has an equally impressive 45-year record of dividend increases. Only a company with consistent earnings growth through the years can boast of such a remarkable feat. Fortis lives up to its Latin name, which means sturdy, robust, and steadfast.

This utility stock displays noticeable long-term growth potential. Earnings growth is consistent, given that practically 100% of income comes from its diversified regulated-utility asset base with long-term contracted operations.

The 3.51% dividend and $100,000 worth of Fortis shares should deliver $877.50 in quarterly income to a would-be investor.

Top-notch operator

Emera is not too far behind Fortis in terms of total returns. People who invested two decades ago in this $14 billion diversified energy and services company were able to realize a 938.47% gain.

Although the company is smaller in size compared with Fortis, this utility stock offers a higher yield of 4.39%. The potential quarterly earnings from a $100,000 investment would be $1,097.50. In a holding period of 20 years, your money would be worth $236,144.56.

Emera is a top-notch operator in Canada, the U.S., and in four Caribbean countries. It engages in the generation, transmission, and distribution of electricity and gas, plus other utility energy services to residential, commercial, as well as industrial customers.

About 90% of Emera’s electric utilities and gas LDCs in North America are regulated, while only 10% is unregulated (gas-fired generating facilities). Aside from the investments in its core business, Emera is also investing in renewable energy assets.

Low degree of risk

The primary goal of conservative investors is to preserve capital and incur negligible, if not zero, losses. If you have the same objective in 2020, your option is to look for income-producing assets that present a lower degree of risk.

Fortis and Emera have bond-like features with better advantages than bonds. Over time, rising inflation can erode the value of your investment in bonds. However, the high dividend yields of both companies should enable you to cope with inflationary increases and significantly lessen their impact.

Now is the excellent time to hold this pair of awesome utility stocks. They are magnets for money in 2020.

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Fool contributor Christopher Liew has no position in any of the stocks mentioned.

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