Do you have a nice warm-and-fuzzy feeling that the stock market has bottomed out and is ready to roar back? Yeah, me neither. That’s not to say that I’m downbeat; I have no doubt whatsoever that a monumental rebound will come. But it wouldn’t surprise me at all if the market first goes down, perhaps even by quite a bit.
The fact of the matter is, though, that none of us know for sure what’s going to happen. A smart strategy for investors to take is to incrementally buy shares on a regular basis over the next few months. With this approach in mind, here are three great stocks to buy even if the stock market plunges again.
1. Brookfield Infrastructure Partners
As its name indicates, Brookfield Infrastructure Partners (NYSE: BIP) owns infrastructure assets. Some of these assets are energy-related, such as electricity transmission systems, natural gas pipelines, and natural gas storage facilities. Others are data-related, including cell towers and data centers. Brookfield also owns ports, railroads, toll roads, and more.
Probably the most important thing to know about the company is that its cash flows are both stable and resilient. Roughly 95% of Brookfield Infrastructure’s cash flows are regulated or contracted. What happens in the overall economy shouldn’t impact the company’s finances very much over the short term. And Brookfield employs a conservative fiscal approach that keeps it from taking on too much debt.
Another key plus for Brookfield Infrastructure is that it’s well diversified. No sector generates more than 32% of the company’s total cash flow. No geographical region accounts for more than 30% of total cash flow.
Don’t think that Brookfield Infrastructure is just a defensive play, though. I personally bought the stock because I thought that it would deliver market-beating total returns over the long run. Brookfield’s steady business enables it to pay a fantastic dividend that currently yields around 6.5%. The company also continually reevaluates its portfolio, selling lower-performing assets to reinvest in higher-performing assets. I think this combination of a strong dividend with a solid growth strategy makes Brookfield Infrastructure Partners a long-term winner.
Facebook (NASDAQ: FB) has already acknowledged that its business is taking a hit from the coronavirus pandemic. The company said in a statement released earlier this week, “We’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19.”
But I think that Facebook will emerge from the current crisis stronger than ever. Why? The issue with businesses cutting back on advertising will only be temporary. However, my view is that the heavy increase in usage of the company’s social media and messaging platforms will have lasting effects. The more people use Facebook, Facebook Messenger, Instagram, and WhatsApp now, the more likely they’ll develop connections that they’ll want to keep in place even after the coronavirus threat has diminished.
Several long-term trends will continue to work in Facebook’s favor. Companies are shifting to digital advertising. E-commerce is growing (with Facebook’s launch of its Marketplace looking smarter every day). Augmented reality (AR) is on the way — and Facebook will be a leader in AR.
Meanwhile, the company’s financial position is exceptionally strong. Facebook has minimal debt, with a cash stockpile of nearly $55 billion. Facebook is built to survive the current challenging environment and thrive afterward.
3. Intuitive Surgical
Some healthcare stocks have been largely unscathed by the COVID-19 outbreak. Not Intuitive Surgical (NASDAQ: ISRG). Shares of the robotic surgical systems pioneer are down close to 25%. I think this sell-off is overdone.
Granted, Intuitive Surgical’s revenue could be lower as hospitals push back elective surgeries. Many of the procedures performed with Intuitive’s da Vinci robotic surgical system aren’t elective, though, such as prostatectomies. More importantly, the hold-up on elective surgeries is only temporary. I fully expect Intuitive Surgical’s revenue will soar after the crisis passes, with an enormous pent-up demand for procedures for which da Vinci is used.
Intuitive Surgical’s future looks very bright. Way too many surgical procedures still have complications, creating opportunities for using robotic assistance. Higher numbers of older individuals will drive growth in the number of procedures performed. International markets are still underpenetrated. Intuitive is even expanding beyond robotic surgery with its recent acquisition of hospital informatics company Orpheus Medical.
Don’t worry about Intuitive’s ability to handle a few difficult months. The company had over $5.8 billion in cash, cash equivalents, and investments as of the end of 2019 with no debt. Robotic surgery isn’t going away, and neither is Intuitive Surgical. Investors can buy this stock right now and be confident of profiting over the long run regardless of what the stock market does next.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Keith Speights owns shares of Brookfield Infrastructure Partners, Facebook, and Intuitive Surgical. The Motley Fool owns shares of and recommends Facebook and Intuitive Surgical. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.
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