While the broader markets have proven resilient so far this year, the macroeconomic uncertainty could keep the volatility elevated, bringing challenges for equity investors. Nonetheless, Canadian investors can rely on the shares of top Canadian corporations that continue to perform well, regardless of the economic situation, to generate steady returns.
So, if you can spare $500, consider investing in these five Canadian stocks with strong fundamentals. These companies have resilient businesses that generate solid earnings and cash flows in all economic situations.
Dollarama
Dollarama (TSX:DOL) is an all-weather stock offering consistent income and growth. This value-priced retailer offers a wide product range at low fixed price points, which continues to drive traffic in all market conditions. As its business remains resilient to economic cycles, Dollarama has continually delivered solid sales and earnings growth and enhanced its shareholders’ returns through higher dividend payouts.
Dollarama’s defensive business model, value pricing strategy, and growing network of stores position it well to outperform the broader markets in the coming years. Moreover, its focus on optimizing capital allocation and profitable growth will enable it to boost its shareholders’ returns through higher dividend payouts.
Canadian National Railway
Shares of Canadian National Railway (TSX:CNR) are a must-have to consistently generate worry-free returns. This rail freight company’s services are deemed essential for the economy, as it is a trade enabler. This means that the company continues to deliver stable financial performance, regardless of the market conditions.
Its well-diversified portfolio, defensive business model, improving operational efficiencies, and strong balance sheet augur well for growth. Moreover, high-quality earnings have led the company to uninterruptedly increase its dividend at an average annualized growth rate of 15% in the last 26 years, making it a lucrative dividend-paying stock.
Telus
Telus (TSX:T) is another dependable stock one can confidently invest in in all market conditions. The diversified telecom company’s ability to generate profitable growth supports its stock price and dividend payouts. Telus increased its dividend 24 times since 2011 and paid approximately $18 billion in dividends since 2004.
Its growing subscriber base, focus on customer retention, and cost savings position it well to generate strong profitability in the coming years. Further, its investments in network infrastructure and the expansion of 5G services will likely accelerate its growth and help it to deliver considerable returns.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) could be a solid addition to your portfolio to confidently generate steady returns irrespective of where the market goes. The retailer’s low-risk business, extensive store presence in the Canadian market, strong balance sheet, and accretive acquisitions enable it to deliver solid total shareholder returns.
Looking ahead, its value pricing strategy, focus on cost optimization, low-cost debt, and strong balance sheet position it well to deliver strong growth and enhance its shareholders’ returns. Also, its ability to acquire and integrate companies will accelerate its growth rate, driving its share price higher.
Fortis
Fortis (TSX:FTS) owns a low-risk electric utility business and generates predictable cash flows. The company’s high-quality assets remain resilient to economic situations while it continues to enhance its shareholders’ returns through higher dividend payments. It increased its dividend for 49 consecutive years. Furthermore, it projects a 4-6% increase in its annual dividends through 2027, making it a top stock to earn worry-free passive income.
Further, its multi-billion capital projects are expected to drive its rate base. Fortis expects its rate base to grow at a compound annual growth rate of over 6% through 2027, which will drive its earnings and dividend payouts. Moreover, energy transition opportunities will likely support Fortis stock.
