A few weeks after winning re-election with the popular vote in 2024, former U.S. president Donald Trump made it clear that he’s not going to sit idle when it comes to trade and border security. In a fiery statement, Trump announced a 25% tariff on all products imported from Mexico and Canada, tying the move to his push to combat illegal immigration and drug trafficking.
Trump’s aggressive stance rattled North American markets, leading to a selloff in many sectors. However, not every company is at risk. Despite tariff worries, some Canadian stocks could continue to perform well in 2025 and beyond due to their domestic focus and diversified operations. In this article, I’ll highlight two fundamentally strong TSX stocks that are likely to remain well-shielded from Trump’s potential tariffs and thrive despite the challenges ahead.
Canadian Tire stock
If Trump’s tariffs affect industries with cross-border dependencies, Canadian Tire (TSX:CTC.A) could prove to be a resilient TSX stock to consider now. The Toronto-based diversified retail giant has a strong domestic focus, with the majority of its operations and supply chain rooted within Canada. It offers a variety of products, from automotive parts and tools to home goods, sports equipment, and apparel.
After surging by 21% over the last eight months, Canadian Tire stock currently trades at $155.14 per share with a market cap of $8.8 billion. The stock also rewards its investors with attractive dividends and has a 2.6% annualized yield at the current market price.
In the three months ended in September 2024, the company delivered solid retail profitability for the third consecutive quarter. This helped Canadian Tire post a strong 21.3% YoY (year-over-year) increase in its adjusted quarterly earnings to $3.59 per share, exceeding Street analysts’ expectations.
Despite recent economic headwinds and a difficult consumer spending environment, Canadian Tire recently raised its annual dividends for the 15th consecutive year, highlighting its strong cash flow and commitment to reward investors.
Hydro One stock
Another TSX stock that could thrive even amid Trump’s tariff concerns is Hydro One (TSX:H). As Ontario’s largest electricity transmission and distribution company, Hydro One operates primarily within Canada, shielding it from cross-border trade risks. The company’s regulated utility business ensures stable, predictable revenues, even during uncertain economic times.
Hydro One currently has a market cap of $26.5 billion as its stock trades at $44.12 per share after climbing by nearly 17% over the last eight months. It also offers an annualized dividend yield of 2.8%.
Over the last 12 months, Hydro One’s revenue climbed by 20% YoY to $8.4 billion, while its adjusted earnings rose 5.6% to $1.90 per share. The company’s regulated business model has allowed it to thrive in recent quarters amid higher energy demand and rate approvals.
To improve its future growth prospects further, Hydro One is continuing to focus on modernizing its infrastructure and expanding its transmission capabilities. The company recently made significant capital investments, including $773 million in the third quarter alone, aimed at strengthening Ontario’s electricity grid. Given these strong fundamentals, I expect this TSX stock to continue soaring in 2025 and beyond.
