Defensive Investing: 2 Reliable TSX Stalwarts

When it comes to defensive investing, stability and reliability are key. Find out which two TSX giants can offer those in spades today.

| More on:
Cogs turning against each other

Image source: Getty Images.

Defensive investing is a suitable strategy for investors worried about short-term volatility in the stock market. Typically, these are investors with shorter investment timelines that don’t have the time to ride out extended downswings in the market.

For long-term investors, all-out defensive investing is usually not optimal. This is because over a long enough period of time, you’ll sacrifice too much in total returns in exchange for short-term stability.

However, it’s a perfectly feasible strategy for investors looking at capital preservation and conservative growth with not a lot of runway left for time in the market. For these investors, more stable stocks are a good option to pursue.

Today, we’ll look at two such TSX giants with characteristics suitable for defensive investing.


Loblaw (TSX:L) is the largest food retailer in Canada and operates various in-store and standalone pharmacies as well. It’s a household name in the grocery space for Canadians.

During a rough time for stocks in 2020, Loblaw managed to post solid revenue figures. A fast launch of its online grocery ordering service surely helped.

Mainly, it was able to succeed while other stocks faltered, because it continued to do its thing — that is, provide essential food and household items to Canadians.

Its ability to protect investors from market swings is evidenced by its beta of -0.11. That means this stock tends to move in the opposite direction of the broader market.

When looking for defensive investing options, that’s certainly an attractive characteristic. Any stock that can insulate you against heavy downturns is a stock worth noting.

Of course, Loblaw doesn’t typically offer investors tremendous growth. Plus, as of this writing its dividend is 1.95%, which is a pretty paltry figure for investors hoping to generate income.

It might not be the flashiest investment, but 2020 has shown you can count on Loblaw. This grocery giant is positioned to continue delivering the goods for defensive investing enthusiasts going forward.


Fortis (TSX:FTS)(NYSE:FTS) is a massive Canadian utility holding company with operations spanning multiple continents. As of this writing, it’s trading at $54.52.

Like with Loblaw, Fortis exhibits defensive traits largely due to the business it’s in. Fortis delivers essential utility services that customers need no matter the circumstances.

Plus, Fortis delivers the vast majority of its services through regulated contracts. As such, its revenue sources are secure, predictable, and reliable.

This all translates to safe and consistent returns for investors. With a beta of 0.05, Fortis has barely any correlation to the market movements as well.

As of this writing, this defensive investing star is yielding 3.71%. So, investors will enjoy decent passive income while investing in Fortis.

Plus, Fortis has a solid track record for continuously growing its dividend over time. This should be music to the ears of defensive investing proponents looking for reliable income.

With strong footing in a non-cyclical business sector, Fortis makes for a solid defensive-oriented stock pick.

Defensive investing strategy

Both Loblaw and Fortis can be formidable additions to a defensive investing strategy. They both offer investors attractive defensive qualities that are ideal for shorter investment horizons.

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. The Motley Fool recommends FORTIS INC.

More on Dividend Stocks

A person builds a rock tower on a beach.
Dividend Stocks

CPP Pension: Boost Your Payouts by $5,232 per Year

You can raise your after-tax CPP by making RRSP contributions. Alimentation Couche-Tard (TSX:ATD) is a good RRSP stock.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

3 No-Brainer Stocks to Buy With $20 Right Now

Here are three no-brainer stocks that are suitable for anyone getting started on their investing journey.

Read more »

growing plant shoots on stacked coins
Dividend Stocks

3 Top Dividend Stocks That Keep Raising Their Payouts

These three TSX stocks are ideal buy as they consistently raise their payouts, depicting their healthy financials.

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

This 5% Dividend Stock Pays Cash Every Month

This monthly dividend stock offers cash every month, but also returns that continue to climb higher from being in a…

Read more »

Solar panels and windmills
Dividend Stocks

How Much Will TransAlta Renewables Pay in Dividends This Year?

TransAlta Corporation’s (TSX:TA) acquisition of TransAlta Renewables stock holds significant implications for income-oriented investors who previously held this monthly dividend…

Read more »

Dividend Stocks

3 Stocks That Can Help You to Get Richer in the Next 5 Years

Consistent growth stocks with a relatively bright future are one of the most trustworthy ways to grow wealth.

Read more »

Dividend Stocks

3 Blue-Chip Stocks Every Canadian Should Own

These Canadian blue-chip stocks are backed by well-established businesses and a growing earnings base, enabling them to generate above-average returns.

Read more »

grow money, wealth build
Dividend Stocks

Is This 7.25%-Yielding Dividend Grower the Ultimate Income Stock?

This top Canadian dividend stock has increased the distribution annually for nearly three decades.

Read more »