3 Top Canadian Defensive Picks for Cautious Investors

These three top defensive picks are among the best stocks Canada has to offer in providing investors with stable long-term returns.

| More on:
edit Safety First illustration

Image source: Getty Images

It may be time to get defensive in the markets right now. Indeed, given where valuations are, cautious investors have few places to hide. Picking undervalued stocks is becoming increasingly difficult, as is creating a defensive portfolio. That said, there are some great defensive picks on the TSX right now. Let’s dive into three of the best options for Canadian investors today.

Top defensive picks: Restaurant Brands

Fast-food conglomerate Restaurant Brands (TSX:QSR)(NYSE:QSR) is a company with a business model as defensive as it gets. Low-priced food tends to always be a hit. In times of economic turmoil, it’s even more so.

Indeed, the company’s core banners including Popeyes Louisiana Kitchen, Tim Hortons, and Burger King are global winners. Accordingly, this is a stock that’s seen as a great growth play in emerging markets. However, in domestic markets, Restaurant Brands’s cash flows have proven to be very stable.

That said, there’s a tremendous amount of upside with Restaurant Brands stock with regards to the pandemic reopening thesis. This is a company that saw its top and bottom lines take a hit as a result of restaurant closures. As the world goes back to normal, so too will Restaurant Brands’ cash flows. For long-term investors, that means more capital appreciation and dividend income.

Accordingly, there’s a lot to like about this stock.


One of the top dividend stocks in the Canadian market, Fortis (TSX:FTS)(NYSE:FTS) ought to be in every retirement portfolio. Indeed, this Dividend Aristocrat hasn’t missed a dividend increase in approximately 47 years. That’s a very long time, filled with recessions, wars, and (most recently) a pandemic.

However, Fortis has been able to pay out impressive dividends over time due to very stable cash flows. As a regulated utility, the company can essentially bank on its cash flows growing at a reasonable rate over the long term.

Thus, investors benefit from the company’s dividend increases in two ways. First, these higher dividends obviously provide inflation-protected income over time. However, the other key factor is that these dividends provide stability to the company’s stock price. Should Fortis’s shares fall too low, its relative yield would invite new investors in. This creates stability and defensiveness for long-term investors.

Kirkland Lake Gold

Finally, Kirkland Lake Gold (TSX:KL)(NYSE:KL) caps off the list. Indeed, there are few sectors more defensive than gold miners. And in this sector, Kirkland Lake is among the best.


Well, Kirkland Lake’s balance sheet is pristine. The company has essentially zero debt, with high-grade production strategically located in mining-friendly jurisdictions. This is extremely bullish for investors looking for a safe, defensive gold miner.

However, Kirkland Lake is also on track to increase production over time. This provides a growth thesis for investors bullish on where the price of gold is headed.

Overall, each of these companies are great long-term picks. Investors would be remiss to not have each of these defensive picks on their watch list right now.

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 stocks mentioned. The Motley Fool recommends FORTIS INC and Restaurant Brands International Inc.

More on Dividend Stocks

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
Dividend Stocks

3 Canadian Dividend Stocks to Buy Hand Over Fist

These three Canadian dividend stocks each offer a unique opportunity, making them some of the best investments to buy at…

Read more »

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

Retirement Wealth: 2 Oversold Canadian Stocks to Buy Now and Own for Decades

These industry-leading dividend stocks look cheap right now and have increased their distributions annually for decades.

Read more »

Tired or stressed businessman sitting on the walkway in panic digital stock market financial background
Dividend Stocks

2 of the Safest TSX Stocks Right Now

The stock market is heading towards a crash. Investors are seeking the safety of dividends, and these two stocks provide…

Read more »

Payday ringed on a calendar
Dividend Stocks

Want Monthly Passive Income? Try These TSX Dividend Payers

In need of extra cash? These dividend stocks offer passive income each month, and you can pick them up cheap…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Want Safe Passive Income? Here Are 2 TSX Dividend Aristocrats for New Investors

Need some safe passive income? TSX Dividend Aristocrats like Fortis (TSX:FTS) are ideal stocks for new investors to hold in…

Read more »

grow dividends
Dividend Stocks

2 Cheap TSX Dividend Stocks to Buy Now

These top TSX dividend stocks now offer 6% yields.

Read more »

Piggy bank next to a financial report
Bank Stocks

Got $500? Create Passive Income of $500 in Just 33 Years

Only have a bit of cash to invest? By investing in the right stock, you could make $500 in annual…

Read more »

calculate and analyze stock
Dividend Stocks

2 Top TSX Dividend Stocks to Buy Now for a Self-Directed TFSA or RRSP

Top TSX dividend stocks are now trading at attractive prices for TFSA and RRSP investors.

Read more »