You probably suspected the good times wouldn't keep rolling indefinitely. Worries about rising cases of COVID-19 caused the stock market to tank on Monday. After six months of a strong rebound following the market meltdown earlier this year, investors are rightfully wondering if another crash could be beginning or is just around the corner.
If we're starting to see the bull market evaporate, remember that the last time it happened presented a fantastic buying opportunity for investors. Here's where to invest $1,000 if we're having a "market crash 2.0" -- or even if we're not.
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1. AstraZeneca
The ideal kind of stock to buy in another market downturn is one that has great growth prospects regardless of what happens and has a potentially big catalyst on the way. AstraZeneca (NASDAQ: AZN) fits the bill perfectly.
Wall Street analysts expect that AstraZeneca will increase its average annual earnings by a whopping 19% over the next five years. When you look at the big drugmaker's product lineup and pipeline, you'll understand why.
Sales for cancer drugs Tagrisso, Lynparza, Imfinzi, and Calquence continue to skyrocket. AstraZeneca also is enjoying strong sales growth for blood thinner Brilinta, diabetes drug Farxiga, and respiratory drugs Fasenra and Symbicort. The company's pipeline includes 166 clinical-stage programs with nine new late-stage candidates.
That brings us to the potential catalyst for AstraZeneca: The forthcoming results from its late-stage study of coronavirus vaccine candidate AZN1222. Last week, the company announced that it received the green light from the FDA to resume a U.S. late-stage clinical trial of the experimental vaccine. If all goes well with this study and others in the U.K. and elsewhere, AstraZeneca stands to make billions of dollars.
2. Brookfield Renewable
What's better during uncertain times than a stock that has much of its revenue guaranteed through contracts? A top renewable energy stock that's also virtually guaranteed to grow tremendously over the next decade -- Brookfield Renewable (NYSE: BEP) (NYSE: BEPC).
Since the current recession began earlier this year, U.S. electricity generation has fallen by 5% while fossil fuel generation has dropped 10%. But renewable electricity generation is up 14% during the period. That shows how resilient Brookfield Renewable's business is.
Brookfield Renewable has delivered an average total return of 18% annually over the last two decades. It achieved this performance during a period when renewable energy sources such as solar and wind were typically more expensive than combined-cycle gas turbines (CCGTs). But today, these renewable energy sources are cheaper than the alternatives.
Countries around the world have established goals to reduce their carbon emissions. So have several major U.S. states as well as multiple large corporations. Brookfield Renewable appears to be set to benefit from the increasing adoption of renewable energy.
3. Dollar General
Dollar General (NYSE: DG) is arguably one of the safest stocks to buy in a not-so-safe market. When the economy and market tanked earlier this year, Dollar General's sales and profits actually increased.
Why was that the case? The company sells the kinds of products that consumers absolutely need and does so at discount prices. It also helps that Dollar General's nearly 17,000 retail locations are conveniently located. More than three-quarters of Americans live within five miles of a Dollar General store.
Discount retailers, including Dollar General, tend to perform quite well during recessions. But the company is especially positioned well to benefit during a pandemic-fueled economic downturn because consumers flock to stock up on staple goods.
Don't look at Dollar General as just a recession play, though. The stock trounced the S&P 500 over the last decade when the economy was doing well. Despite its rapid growth, Dollar General still has ample opportunities to expand across the U.S.
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Keith Speights owns shares of Brookfield Renewable Inc., Brookfield Renewable Partners L.P., and Dollar General. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
