Navigating Bear Markets: Top TSX Stocks Proven to Outperform

Investors should at least keep watch of these top TSX stocks to target buying opportunities particularly during bear markets.

| More on:
A bull and bear face off.

Source: Getty Images

Who doesn’t want stocks that outperform to make more money? To navigate bear markets well, investors can strive to buy stocks that outperform in the long run when there are market corrections. It’s a good idea to keep watch on stocks that have outperformed the market over the last 10 years. Here are a couple of top TSX stocks to get you started.


goeasy (TSX:GSY) is a leading Canadian non-prime lender whose business has done very well in the long run with strong growth. For instance, in the past 10 years, it increased its adjusted earnings per share at a compound annual growth rate of about 29.5%! This drove total returns of almost 27.9% per year in the period!

Notably, the stock is a roller-coaster ride. When the economy is gloomy, the stock can fall meaningfully. Brave investors with a long-term investing approach should do well by loading up shares at those times. For example, during the 2020 pandemic market crash, the growth stock lost over 60% of its value from peak to trough. Within a year, though, goeasy stock recovered to its high, and subsequently, in 2021, it more than doubled from that high.

Today, at the recent price of about $158 per share, the stock appears to be fairly valued, trading at its long-term normal valuation. Interested investors can consider starting to build a position here if they are bullish on the company. And, of course, back up the truck should a market correction occur.

The stock also offers a growing dividend. Its recent dividend yield is roughly 2.4%.

XIU Total Return Level Chart

GSY, ATD, and XIU 10-Year Total Return Level data by YCharts based on initial investment of $10,000

Alimentation Couche-Tard

Alimentation Couche-Tard (TSX:ATD) is another growth stock that has outperformed the market in the long run but should be less volatile than goeasy. It does, indeed, have better stock price resilience. As a global convenience store consolidator with many locations that offer roadside fuel retail services, the business has proven to generate stable or growing earnings and cash flows through the economic cycle, even when there are recessions. The company having the free cash flow to buyback shares may be another factor in its upward stock price momentum.

Mergers and acquisitions remain a key part of Couche-Tard’s growth strategy. Management is disciplined and always deleverages the balance sheet after making major acquisitions. For now, management continues to see mergers and acquisitions opportunities globally, particularly in the United States and Asia.

In the past decade, Couche-Tard increased its adjusted earnings per share at a compound annual growth rate of about 22.5%, driving total returns of approximately 20% per year in the period. In comparison, the Canadian stock market’s total returns were roughly 8.1% per year.

Analysts estimate Couche-Tard trades at a discount of about 10% from its fair value at about $78 per share. Although the general trend of the stock is upward, occasionally, the retail stock does provide small dips as buying opportunities for investors.

Since the company has deleveraged to historically low levels, it’s likely looking for the next big acquisitions, which would drive future growth, given its strong track record of execution.

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 Kay Ng has positions in Alimentation Couche-Tard. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Dividend Stocks

Where Will Canadian Utilities Stock Be in 5 Years?

Canadian Utilities (TSX:CSU) is a classic example of a stock where the dividend is all you get. Can the company…

Read more »

Man holding magnifying glass over a document
Dividend Stocks

2 Stocks I’m Watching for Big Passive Income

Consider Bank of Nova Scotia (TSX:BNS) and another top passive-income play to power your dividend portfolio!

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

These top TSX stocks have increased their dividends annually for decades.

Read more »

bulb idea thinking
Dividend Stocks

2 Supercharged Dividend Stocks to Buy if There’s a Stock Market Sell-Off

These two top stocks offer attractive yields, have reliable operations and are dividend aristocrats, making them two of the best…

Read more »

Dividend Stocks

Got $1,000? Buy These Hot Growth Stocks Before They Take Off

These growth stocks just reported earnings that should have investors eager for more over the next year and beyond. They're…

Read more »

question marks written reminders tickets
Dividend Stocks

Better Buy: Loblaw Companies or Metro Stock?

Loblaw Companies (TSX:L) stock is riding on recent momentum. Meanwhile, Metro (TSX:MRU) is executing for future earnings growth.

Read more »

Senior Couple Walking With Pet Bulldog In Countryside
Dividend Stocks

Got $500? 2 Financial Stocks to Buy and Hold Forever

If you got some extra cash on hand, consider picking up these financial stocks and holding them forever for growing…

Read more »

woman analyze data
Dividend Stocks

3 Magnificent Stocks to Buy That Are Near 52-Week Lows

These three stocks are magnificent, despite hitting 52-week lows recently. But there is one I love in particular.

Read more »