Market Volatility: 3 Stable Stocks to Anchor Your TFSA

Given their solid underlying businesses and healthy growth prospects, these three stable stocks are excellent additions to your TFSA.

| More on:
Volatile market, stock volatility

Image source: Getty Images

Despite the global headwinds, the United States’s GDP (gross domestic product) rose by 4.9% in the third quarter, higher than analysts’ expectation of 4.7%. Strong consumer spending, increased residential and government spending, and higher exports drove the company’s GDP. However, these solid GDP numbers have failed to improve investors’ sentiments.

The fear of the Federal Reserve continuing with conservative monetary policies amid sticky inflation has made investors nervous, leading to volatility in the equity markets. Amid the uncertain outlook, investors should be careful while investing through their TFSA (Tax-Free Savings Account), as a decline in stock price could also lower its cumulative contribution room. Meanwhile, here are three stable TSX stocks that investors can add to their TFSA, given their solid underlying businesses and healthy growth prospects.


Dollarama (TSX:DOL) is one of the excellent defensive stocks to have in your portfolio. It has grown its revenue and net income at an annualized rate of 11% and 17%, respectively, over the previous 12 years. Its wide range of product offerings at attractive price points and extensive presence across Canada have driven its financials.

Meanwhile, I expect the uptrend in the company’s financials to continue. It focuses on expanding its store network by opening around 60-70 stores yearly to increase its store count to 2,000 by 2031. The discount retailer is strengthening its direct sourcing capabilities and optimizing its logistics to offer its products at a greater value to its customers. Given its solid underlying business and healthy growth prospects, I believe Dollarama would be an excellent addition to your portfolio.


Second on my list is Fortis (TSX:FTS), which operates 10 regulated utility assets serving approximately 3.4 million customers. Supported by its solid regulated utility business, the company has delivered an average total shareholder return of 10% for the previous 10 years. Despite the rising interest rates, the company has beaten the broader equity markets this year by returning 5.6%.

Further, the electric and natural gas utility company has planned to make a capital investment of $25 billion from 2024 to 2028. Meanwhile, the company expects to meet 55% of those investments from the cash generated from its operations, 11% from equity, and 34% from debt. These investments could expand its rate base at an annualized rate of 6.3%. Amid these growth initiatives, Fortis’s management expects to increase its dividend at an annualized rate of 4-6% through 2028. The company’s forward yield currently stands at 4.25% and trades at an attractive NTM (next 12-month) price-to-earnings multiple of 17.5, making it an attractive buy.

Waste Connections

Another stable TSX stock I am bullish on is Waste Connections (TSX:WCN), which offers non-hazardous solid waste management services across North America. It operates primarily in secondary or exclusive markets. So, the company faces less competition, thus allowing it to enjoy higher margins. The company has been expanding its footprint through strategic acquisitions, thus supporting its financial growth. 

Meanwhile, the company reported its third-quarter performance on Wednesday, with its revenue and adjusted EPS (earnings per share) growing by 9.8% and 6.4%. Amid its solid operational execution, the company’s adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) margin expanded by 120 basis points compared to the previous year’s quarter.

Despite its strong performance, the waste management company lost 6.6% of its stock value on Thursday. In its earnings statement, the company’s management announced that it faces certain site-specific issues at its California and Texas landfills. The management projects that these issues could lower its fourth-quarter revenue, adjusted EBITDA, and adjusted free cash flows by $20 million, making investors nervous. Despite these short-term fluctuations, I am bullish on Waste Connections due to its solid underlying business and expansion initiatives.

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 Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

More on Investing

Various Canadian dollars in gray pants pocket
Dividend Stocks

2 Cheap Dividend Stocks to Boost Your Passive Income

Bank of Nova Scotia and TC Energy pay attractive dividends that should continue to grow.

Read more »

Energy Stocks

2 Top Dividend-Paying Energy Stocks to Buy on the TSX Today

These two dividend-paying Canadian energy stocks are outperforming the broader market in 2023 by a big margin.

Read more »

sale discount best price
Stocks for Beginners

3 TSX Stocks on Sale for Long-Term Investors

These three TSX stocks offer amazing options for long-term holders, thanks to a history of growth and more to come.

Read more »

Hands holding trophy cup on sky background
Dividend Stocks

3 Dividend Yield Champions to Buy Today

Manulife Financial (TSX:MFC) and two other Dividend Yield Champions look ripe for buying this fall and winter.

Read more »

edit Woman calculating figures next to a laptop

Adjusting Your Portfolio for the New Normal: Higher Interest Rates in Canada

Here's how I would personally adjust my portfolio for today's high interest rate environment.

Read more »

Man making notes on graphs and charts

Can You Become a Millionaire by Investing $500/Month?

Given their long-term growth potential and solid underlying businesses, these three TSX stocks can deliver superior returns in the long…

Read more »

A golden egg in a nest
Dividend Stocks

RRSP Investors: 2 Dividend Stocks to Build Your Retirement Nest Egg

These industry-leading stocks can be an excellent part of your portfolio to align with your retirement plan for a sizeable…

Read more »

edit Balloon shaped as a heart
Dividend Stocks

If You Like Dividends, You Should Love These 3 Stocks

Canadian investors can consider buying high dividend TSX stocks such as Enbridge to create a passive-income stream for life.

Read more »