5 Large Caps That Provide Shelter From Falling Resource Stocks

Though scarce, the Canadian market does offer a few places to hide.

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Resource stocks have taken a well-documented beating of late, bringing the Canadian market down with them.  However, there is a collection of stocks from other sectors that have shrugged off this resource-centric meltdown and merrily gone about their business.

Shoppers Drug Mart (TSX:SC) faced some selling pressure earlier in the year when provincial governments agreed to cap the price on six of Canada’s most popular generic drugs.  This sell-off was short-lived and the shares have rallied by 8% since to sit within a whisper of their 52-week high.  Shoppers pays a healthy dividend and provides a great place to hide for beleaguered resource investors.

BCE Inc. (TSX:BCE,NYSE:BCE) is another name that has a dominant market position and hasn’t skipped a beat during the Canadian market’s decline.  Like Shoppers, BCE pays a healthy dividend and can be expected to hang-in nicely as shell-shocked resource investors seek out the relatively few safe havens that exist in our market.

Another collection of names that has provided investors with a security blanket during this time of need is the grocers (or at least grocery related).  Though they have levelled off of late, Metro (TSX:MRU) shares had a great past year, knocking down a near 22% return.  Loblaw (TSX:L) owner George Weston (TSX:WN) achieved a similar return over this period.  Loblaw itself is another valid option for those seeking shelter.  Expect these grocery stocks to play a similar safe haven role as Shoppers and BCE if investors continue their stampede out of resources.

Canadian investors deserve to own great businesses and the U.S. market is home to some of the best in the world.  We have created a special report that identifies 3 U.S. businesses that are worthy of your hard earned investment dollars and will help diversify your portfolio away from the idiosyncratic Canadian market.  Simply click here to receive “3 U.S. Stocks Every Canadian Should Own” – FREE!

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Fool contributor Iain Butler does not own shares in any of the companies mentioned at this time.  The Motley Fool has no positions in the stocks mentioned above.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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