Investing in the stock market has consistently provided the sorts of returns long-term investors have required to maintain a quality of life in retirement. However, for those looking to not only grow one’s wealth in retirement but keep the wealth generated during down markets, finding stable stocks that can hold their value is important.
The following three companies are ones I’d put on such a list, for investors who may be anxious about what is to come.
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Hydro One
Hydro One (TSX: H) is one of the largest electricity transmission and distribution providers in Ontario. The utilities giant serves more than 1.5 million rural customers, or 26% of the total number of customers in the region. Thus, this is an essential company providing an essential service to a captive clientele who really has no other choice but to pay their bills in a timely fashion.
This sort of business model provides very stable cash flows and a beta (which measures price volatility relative to the overall market) of only 0.34. This means that no matter what the market does, Hydro One tends to move in a rather steady direction. And of late, that direction is mostly up and to the right (see chart above).
The company’s recent earnings have been solid, with Hydro One bringing in $0.49 of earnings per share, up 5.7% on a year-over-year basis. I expect the company to continue to provide similar growth over the long term, making this among the top stable stocks to own even after its current run.
Restaurant Brands
Restaurant Brands (TSX: QSR) is a Canada-based fast food giant with some of the most iconic banners (ahem, Tim Horton’s for Canadian investors out there) in its portfolio. The company generates its revenue primarily from royalty fees and lease income from its franchised locations, as well as operating a number of company-owned restaurants.
Restaurant Brands has continued to provide very stable earnings growth over time, which it continues to return to shareholders in the form of dividends and share buybacks. With a dividend yield of 3.3% supported by expected unit growth of 5% (expected for 2025) and stable or improving franchise profitability, this is a stock I think could have major capital appreciation upside ahead (in addition to its current yield).
Over the long term, Restaurant Brands’ portfolio companies have shown very stable and consistent growth. So long as pricing power metrics remain in place moving forward, this is a stock I think investors can safely hold for years to come.
Dollarama
Rounding out this list of stable stocks to buy, we have none other than dollar store giant Dollarama (TSX: DOL). The company’s portfolio of discount retail stores in metropolitan areas, small towns, and mid-sized cities in Canada has performed very well over the long term. Indeed, one look at the company’s stock chart below really tells the entire story for this retailer that continues to grow over time.
I think Dollarama should play a central role as a key company investors can lock up for years to come due to its core business model and continued outperformance. The company reported 7% sales growth on a year-over-year basis this past quarter, with comparable same-store sales rising 15.5% year-over-year. So, if pricing power comes back to this discount retailer, it’s clear that margins and profitability should rise to an even greater degree.
Dollarama’s strategic initiatives played a crucial role in its stock price growth. The company plans to expand its store network across Canada, aiming to operate 2,000 stores by the end of 2031. The potential of Dollarama seems to lie in its ability to source products globally and manage the supply chain with the ability to preserve margins without compromising on competitive pricing.
