As we head into the holiday season, many consumers may be ratcheting up their spending plans, and rightly so. We’re headed into a few weeks, which should provide incredible economic activity, and we’ll have to see how many of the top companies perform when they report results next month.
For those looking to capitalize on what may be a strong end to 2024, here are three companies I think are worth considering right now. Each of these Canadian stocks is a leader in its respective industry and could provide portfolios with a level of stability that few other companies can right now.
Let’s dive in!
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Hydro One
One of the top Canadian utilities stocks I continue to focus on is Hydro One (TSX: H). Indeed, Hydro One happens to be the largest electricity transmission and distribution company in Ontario, servicing what many consider to be the most important market (economically) in the country. The firm provides very consistent revenue and cash flow streams as a regulated utility, providing a low-risk option for investors seeking relative consistency in this current market environment.
I think this consistency can be overlooked. That’s because if we are indeed headed into a recession in 2025 (as many experts suggest could be the case), diversifying one’s portfolio into companies with very durable and sustainable revenue and income streams makes sense. On top of this fact, it’s worth pointing out that Hydro One’s dividend yield of around 2.8% is very stable and represents a distribution that’s only increased over time.
Being in the utility industry, Hydro One is considered a defensive stock, which means it can still do well during periods of economic recession, making it a safe bet for long-term investors. An add-on to the holiday investment portfolio, Hydro One’s regulated business model guarantees predictable cash flows, and that’s something all investors should be after right now.
Loblaw Companies
Loblaw Companies (TSX: L) is indeed the biggest food retailer in Canada, running grocery stores, pharmacies, and lines of apparel. With the prominence of its various banners, which include Loblaw, Shoppers Drug Mart, and No Frills, Loblaw has become a very popular household name throughout Canada and a top stock to invest in over the long term. The company’s stock chart below shows how profitable being a quasi-monopoly in the Canadian grocery retail space has been over time.
Loblaw’s orientation toward food, pharmaceutical drugs, and other necessities provides investors with resilience in any economic environment. Since everyone has to buy groceries and medicines, Loblaw presents opportunities for constant performance. Its investment in digital retail and online grocery delivery services makes it a competitive force in fast-changing retail development.
Notably, Loblaw has also delivered a consistent increase in dividend payments, which makes it more attractive as a long-term investment. Moreover, extensive consumer acceptance of online shopping and healthy food choices provides Loblaw with a strong potential to exploit these changes. With a consistent dividend yield and growth-perfused initiatives, Loblaw deserves a place in the holiday stock gifting.
Dollarama
Dollarama (TSX: DOL) is the leading value retail chain in Canada, with its extensive portfolio of goods offered to consumers at reasonable prices. The company operates around 1,500 stores across Canada and has a fast-growing Latin American presence through its Dollarcity brand.
During bad times, consumers flock to discount retailers. At such a stage in the overall economic cycle, Dollarama is built to withstand attacks. The low-cost appeal ensures a broad customer base and low revenue volatility. In addition, the growth potential is attacking Dollarama aggressively on two fronts: increasing its store count and the number of offerings in stores.
In addition, It has shown consistent earnings growth over the years, and the share price has outperformed the market for years. Dollarama has an ambitious growth strategy, including expansion into Dollar City in Latin America and product category additions in Canada. With its ability to thrive across the economic spectrum, this is a stock I think can provide plenty of capital appreciation over the long term and is a top stock I think is worth buying before the year is out.
