Although the market has been rallying for most of 2024 now as interest rates have begun to decline, there is still a tonne of uncertainty today, which has led to the significant selloff in the past few weeks, reminding us why buying safe and reliable stocks is essential for successful long-term performance.
There continues to be uncertainty in both the economy and the stock market about whether policymakers can achieve a soft landing. Furthermore, we’re now seeing increased political uncertainty with a new administration entering office in 2025 south of the border.
Not to mention, there’s also mounting instability in Canadian politics, including questions about the current government’s longevity and its ability to navigate pressing economic challenges.
This uncertainty highlights the importance of focusing on high-quality stocks with proven resilience during turbulent times. These are stocks that can still earn you a return and help grow your portfolio but are also much less volatile than the broader market to help protect your capital.
So, if you’re looking to shore up your portfolio or are concerned with the increasing uncertainty in the stock market today, here are two of the best and most reliable stocks in Canada to consider buying today.
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One of the lowest volatility and most reliable stocks to buy on the TSX
When it comes to finding reliable stocks that you can buy and hold with confidence no matter what the economic environment, there may not be a better stock than Fortis (TSX:FTS) to consider buying right now.
First off, Fortis is a utility stock, one of the most defensive businesses you can invest in.
It provides essential services whose demand hardly ever fluctuates no matter what the state of the economy. In addition, the industry is regulated by governments, ensuring a reasonable return on its investments.
However, on top of the benefits it shares with other utility stocks, Fortis is also very well diversified and has an unbelievable track record as a reliable investment.
Not only does it help protect investors’ capital and has a beta of just 0.27, showing it’s one of the lowest-volatility stocks in Canada, but it also has a whopping 51 straight years of dividend increases.
Therefore, it’s consistently generating a profit, plus it’s also consistently expanding its operations and growing that profitability, leading to significant and consistent increases in the passive income it generates.
For example, in just the past five years, including through the pandemic and period of higher inflation and interest rates, Fortis increased its dividend by more than 28% over that stretch.
In addition, it’s also earned investors a total return of more than 34% over that stretch, or a compound annual growth rate of 6.1%. That’s not too shabby for a stock that can both protect your capital and generate growing passive income, especially considering interest rates are still higher now than they were five years ago.
So, if you’re looking for reliable stocks to buy today, Fortis and its current dividend yield of 4.1% is undoubtedly one of the best there is.
A top defensive growth stock
In addition to Fortis, another high-quality stock that’s both reliable and has significant growth potential is Brookfield Infrastructure Partners (TSX:BIP.UN).
First and foremost, because Brookfield is an investor in infrastructure assets, much of its business is defensive and reliable. With assets such as telecom towers, data centres, ports, utilities, railroads and more, Brookfield is built to withstand market downturns and recessions.
It even has the majority of its revenue indexed to inflation, which has been essential in recent years not just to mitigate risk but also to take advantage of the complex economic environment.
In addition to its investments in reliable assets, though, Brookfield’s also consistently looking to recycle its older, more mature businesses and reinvest that capital into new, undervalued opportunities. It’s this strategy that gives it a tonne of long-term growth potential.
In fact, over the long haul, management targets annual returns of 12% to 15%. Furthermore, it also aims to increase its distribution by 5% to 9% each year.
So, if you’re looking to buy a stock that’s both reliable and provides significant growth potential, Brookfield and its current yield of 5.1% is one of the best in Canada.
