5 Large Caps That Provide Shelter From Falling Resource Stocks

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

Iain Butler

Chief Investment Advisor, Motley Fool Canada Fool since November 2012 Iain Butler is Lead Advisor for Stock Advisor Canada. He is also the Chief Investment Advisor for Motley Fool Canada. Before joining the Fool, Iain was a “buy-side” analyst and through this experience is well-versed in the idiosyncratic ways of the Canadian market. His investing interests are centred on scouring the market for interesting businesses that trade at reasonable prices and offer an appealing risk/reward relationship. Since joining the Fool in 2012, Iain dedicates each day to spreading Foolishness throughout this great country!

Published April 19, 2013 11:51 am EDT

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.

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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.