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Analyzing 2017: These Were the Most Stable Stocks on the TSX Last Year

If you’re worried about the recent sell-off in the markets, you’re not alone. It’s for that reason that I compiled data from 30 of the most popular stocks that were traded on the TSX last year, pulled their activity, and then did some analysis on that data. In one analysis, I looked at the volatility and overall stability of a stock and assessed which ones were the most and least stable.

Measuring stability

How I measured stability involved looking at how big the largest swing was each day from the average price (which I calculated using high, low, close, and open prices). To do this, I took the difference of either the high and the average or the low and the average, whichever resulted in the largest swing, or the most volatility. Then I divided this by the average price to arrive at a stability score for the day.

I computed this across all the trading days of the year for 30 different stocks across multiple sectors.

My findings

The results made sense. I found that the safest stocks were blue-chip stocks that generally didn’t have much risk, including bank stocks. The most unstable stocks were pot stocks and companies that saw a lot of controversy in the year, such as Home Capital Group Inc.  (TSX:HCG), which was the second most unstable stock in my results, behind only Aphria Inc.  (TSX:APH).

The most stable stocks

Now I’ll unveil the stocks that were the safest in 2017 per my calculations. Again, this was not a list of every stock on the TSX, but it does include the most popular and actively traded ones.

BCE Inc.  (TSX:BCE)(NYSE:BCE) had the lowest stability score, indicating it did not have a lot of volatility during the year. Although I’m not a fan of BCE for the long term, I’ll admit the results spoke for themselves. In 2017, the largest single-day decline for the stock was just 1.9%, while the largest gain was less than 1.7%.

Although this suggests a narrow range for the stock, for dividend investors looking for stability, BCE could be a great addition to your portfolio.

Hydro One Ltd.  (TSX:H) was the next best stock in terms of volatility of those that I pulled. The worst decline the stock had was close to 4%, but in total, only three times did it see single-day declines reach over 2%. The utility stock offers investors a great dividend, and with its recent expansion into the U.S. markets, it could have a lot of potential for future growth.

Royal Bank of Canada  (TSX:RY)(NYSE:RY) was the third most stable stock, although it was tied with other bank stocks Canadian Imperial Bank of Commerce  (TSX:CM)(NYSE:CM) and Toronto-Dominion Bank (TSX:TD)(NYSE:TD). I broke the tie by looking at the standard deviation in closing prices. RBC’s standard deviation for the year was just 3% of its average closing price compared to 4% for the CIBC and 5% for TD.

However, it’s hard to go wrong with any of the big banks in Canada given their strong and consistent returns over the years.

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Fool contributor David Jagielski has no position in any of the stocks mentioned.

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