3 Top Picks to Consider This Summer

Here are three of my top defensive growth picks I’d invite investors to consider in this current market environment.

| 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

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Summer is right around the corner. That’s as good an excuse as any to do some portfolio cleanup.

With the stock market seeing some increased volatility in recent days, looking for top-quality defensive picks to integrate into one’s portfolio is a great idea today. These three top picks are some of the best defensive names on the TSX right now, in my view.

Algonquin Power

The hybrid business model with a diverse renewable portfolio makes Algonquin Power & Utilities Corp. (TSX:AQN)(NYSE:AQN) a hot play in the utilities sector.

Recently, the company has emerged as an impressive bond proxy in the market. Thus, it’s triggering a lot of positive buzz around its long-term prospects.

If its bond-like yield wasn’t lucrative enough, Algonquin also has strong core fundamentals to rely on. The company’s regulated utilities business provides a degree of defensiveness utilities plays generally provide. However, Algonquin’s investment in high-growth segments of the renewable power space make this stock a great defensive growth play for long-term investors.

As ESG investing continues to pick up steam, now’s a great time to consider this play.

Kirkland Lake Gold

Though gold continues to underperform, I still think there’s tonnes of upside for this defensive sector right now. For those looking to play gold, I think gold miners are the way to go. And among gold miners, Kirkland Lake Gold (TSX:KL)(NYSE:KL) is definitely a top pick of mine.


Well, for starters, Kirkland Lake is currently trading at a dirt-cheap price. The company’s valuation multiple of only 13-times earnings is well below where it should be relative to the sector.

Additionally, the company’s earnings results have been impressive of late. Given the company’s low cost of production, and the higher price of gold of late, Kirkland Lake has been printing cash. This company’s year-over-year revenue growth of 69% has blown away expectations. Earnings growth of 38% year-over year isn’t shabby as well.

Gold’s about as safe a sector as one can invest in long-term. Those seeking a portfolio hedge can’t do much better than with Kirkland Lake right now.

TD Bank

Stability and income are the top goals for every conservative investor. While there are certainly some great options available in the market, my vote still goes to Toronto-Dominion Bank (TSX:TD)(NYSE:TD) in the banking space.

Canadian banks have recovered nicely from the pandemic-induced crisis we saw a year ago. Among its peers, TD has been one of the best performers of late. The company’s U.S. exposure has turned out to be a good thing, given the rate of reopening south of the border.

Additionally, TD’s focus on operational efficiency has helped this stock tremendously. The bank has focused on streamlining its operations, focusing on digital banking initiatives to improve margins over time.

These initiatives will continue to pay dividends (figuratively and literally) for long-term investors. Accordingly, for those seeking defensive growth, TD is among the best banks to consider today.

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 Chris MacDonald has no position in any of the stocks mentioned.

More on Dividend Stocks

Woman has an idea
Dividend Stocks

2 Low-Risk Growth Stocks Paying Great Dividends

These top TSX dividend stocks give investors exposure to interesting growth opportunities.

Read more »

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

Got $300? 2 Simple TSX Stocks to Buy Right Now

These two simple TSX stocks have everything a long-term investor looking to dollar cost average into a position wants right…

Read more »

A golden egg in a nest
Dividend Stocks

Millennials: No Excuses! Start Saving for Retirement Right Now.

Millennials, we need to stop complaining and start bragging. We're great savers, so it's time to start investing in TSX…

Read more »

Value for money
Dividend Stocks

3 UNDERVALUED TSX Stocks to Buy in August

Here are some attractively valued TSX stocks for the long term.

Read more »

A young man throwing and catching his daughter above his head
Dividend Stocks

Parents: Double Your CCB Payments This Month!

Parents can use those CCB payments to their benefit and double them this year month after month -- no waiting,…

Read more »

stock market
Dividend Stocks

I’m Buying These 3 Resilient Stocks During a Bear Market

TD Bank stock is among the three stocks I'm buying to protect my portfolio from a bear market and to…

Read more »

edit Safety First illustration
Dividend Stocks

4 of the Safest Dividend Stocks on Earth Right Now

These dividend stocks offer up strong dividends, a cheap share price, and safety from growing, safe sectors of the market.

Read more »

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

Change Your Future: What to Hold in a TFSA in 2022

Holding dividend growth stocks in a TFSA long-term can change the financial futures of worried Canadians.

Read more »