Defensive TSX Stocks: 3 to Watch

If you’re looking to safeguard your investments, consider adding these defensive TSX stocks to protect your portfolio from turbulent markets.

| More on:
Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept

Image source: Getty Images

While markets have seen a small rally in recent sessions, there is still plenty of volatility. Under these conditions, defensive TSX stocks tend to be able to outperform the market.

For many long-term investors, short-term risk isn’t a huge concern. As such, they’re often better off just sticking to their long-term plan and continuing to invest in cheap blue-chip stocks.

However, sometimes adjustments must be made. This is especially true for investors nearing retirement, as they can’t afford to sink cash into an investment that might take years to turn a profit.

Today, we’ll cover three of the top defensive TSX stocks for investors to keep an eye on as markets bounce around.


Metro (TSX:MRU) is a major player in the grocery and pharmaceutical space in Canada. It has nearly 1,000 grocery stores under its operation, with a further 650 standalone drug stores across the country as well.

As a premier consumer staple stock, Metro is one of the few stocks that is trading higher now than it was back in February. In fact, Metro stock is up over 11% year to date. As it provides essential goods and services to its customers, expect Metro is to continue posting consistent earnings.

One of the main knocks against Metro is its lack of a solid dividend. However, its yield is respectable enough and the upside in share price during turbulent times should be enough to highlight Metro’s value to investors.


Loblaw (TSX:L) is another Canadian grocery and pharmaceutical player and is even larger than Metro.

This defensive TSX stock is also up rather than down year to date, and shows promising signs that it can continue its momentum.

As the biggest player in the Canadian grocery space, Loblaw is poised to outperform more cyclical or speculative stocks during market volatility.

While Loblaw’s dividend is slightly higher than Metro’s, it’s still only 1.74%. However, you get a bit more stability and reliability with Loblaw as well.


Dollarama (TSX:DOL) is the largest dollar store retailer in Canada. It serves customers in every province across the country and operates over 1,000 locations.

Dollarama provides cheap grocery and household items to customers. During a recession, the demand for cheap non-perishable and canned goods could see an increase, leading to consistent and potentially growing business for Dollarama.

As of now, this defensive TSX stock is slightly down year to date, but not more than the broader markets. This makes sense, as it isn’t a full capacity, first-rate grocer by any means. However, if the economy worsens down the road, I’d expect Dollarama to start out-performing the market by noticeable margins.

In terms of dividends, Dollarama doesn’t offer much at all to its investors. So, this might be a big enough knock to discourage investors from Dollarama and instead lead them to other defensive TSX stocks like Metro and Loblaw.

Defensive TSX stock strategy

For some investors, moving a portion of their portfolio to defensive TSX stocks could be the right play. These are investors who are looking to stay relatively liquid and don’t want to lock funds into stocks that could take years to recover.

Luckily, there are some solid defensive TSX stocks on the market. The three discussed today all offer different advantages to investors. The majority of investors will feel most comfortable with Loblaw, but they’re all worth considering.

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.

Fool contributor Jared Seguin has no position in any of the stocks mentioned.

More on Coronavirus

little girl in pilot costume playing and dreaming of flying over the sky

Air Canada Stock: How High Could it go?

AC stock is up 29% in the last six months alone, so should we expect more great things? Or is…

Read more »

eat food

Goodfood Stock Doubles Within Days: Time to Buy?

Goodfood (TSX:FOOD) stock has surged 125% in the last few weeks, so what happened, and should investors hop back on…

Read more »

stock data
Tech Stocks

If I Could Only Buy 1 Stock Before 2023, This Would Be It

This stock is the one company that really doesn't deserve its ultra-low share price, so I'll definitely pick it up…

Read more »

Aircraft Mechanic checking jet engine of the airplane

Air Canada Stock Fell 5% in November: Is it a Buy Today?

Air Canada (TSX:AC) stock saw remarkable improvements during its last quarter but still dropped 5% with more recession hints. So,…

Read more »

Airport and plane

Is Air Canada Stock a Buy Today?

Airlines are on the rebound. Does Air Canada stock deserve to be on your buy list?

Read more »

A patient takes medicine out of a daily pill box.

Retirees: 2 Healthcare Stocks That Could Help Set You up for Life

Healthcare stocks offer an incredible opportunity for growth for those investors who look to the right stocks, such as these…

Read more »

sad concerned deep in thought

Here’s Why I Just Bought WELL Health Stock

WELL Health stock (TSX:WELL) may be a healthcare stock and a tech stock, but don't let that keep you from…

Read more »

healthcare pharma

WELL Stock: The Safe Stock Investors Can’t Afford to Ignore

WELL stock (TSX:WELL) fell 68% from peak to trough, and yet there's no good reason as to why. So now…

Read more »