The Covid-19 pandemic is nothing like anything most of us have seen in our lifetimes. That makes it hard to predict what turn the economy and the stock markets will take next. Some of us might even get the urge to panic-sell as the stock market crash ensues. After all, it’s better to cut your losses and run than sit around and wait for further erosion of our capital base. Yes?
We couldn’t be more wrong.
It’s true that the pandemic itself is new, but neither the economy nor the stock markets are strangers to crises. They’ve happened multiple times in the past, and will happen in the future as well. But if economies and markets have survived them, clearly, so would have at least some of the companies. It’s hard to imagine a recession that destroys all business in its wake!
A safe FTSE 100 growth share
It so happens that several FTSE 100 companies have impressive endured through tough times. Some of them actually survived the Great Depression that started in 1929. And they are nowhere close to being done. On the contrary.
For those of us who like to play it safe, there’s the Anglo-Dutch consumer goods giant Unilever. It has its roots back in the late 19th century. And incidentally, it came together under its current name in 1929, coinciding with the start of the Great Depression. I’ve made a case for buying this share in another article today, if it interests you.
Long history and good income, even in the stock market crash
The FTSE 100 tobacco biggie Imperial Brands is another safe stock to consider buying. It’s in the process of re-orienting itself to a world that’s increasingly moving away from traditional tobacco products to ‘next generation’ ones. It remains to be seen how fast and how successfully it manages the transition. But do consider this.
The company came together under the name of ‘Imperial Tobacco’, which it used until a few years ago, at the turn of the 20th century. It also has a high dividend yield of 12.5%. If we are wondering about dividend safety, we can take heart from IMB’s latest trading update. Released at March end, IMB says that there’s been “no material impact” on its performance till then.
A rewarding stock for the resilient
For investors with higher resilience to volatile share price movements, the mining giant Anglo American is a good pick in my view too. It cut its production guidance in the last week of April, with the coronavirus crisis still underway. But, I thought it’s interesting that investors shrugged this news off completely. However, its share price is still far lower than it was in the pre-crash levels. AAL is over a 100 years old, which lends it gravity. There’s more. It has a 6.3% dividend yield right now. The owner of De Beers, the leading global diamond company, isn’t about to vanish into thin air. I’d buy it today.