After a 3.6% decline last month, the S&P/TSX Composite Index is witnessing healthy buying this month, rising 1.4% year-to-date. However, uncertainties regarding the impact of the Donald Trump administration’s proposed tariffs on imports are concerning. Thus, the equity markets could remain volatile in the near term. Given the uncertain outlook, investors should balance their portfolios with quality growth, defensive, and dividend stocks. Meanwhile, here are my four top picks.
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Celestica
Celestica (TSX:CLS) is an electronics manufacturing services company. It serves multiple sectors, such as aerospace and defence, and capital equipment business under the ATS (advanced technology solution) segment and the communications and enterprise sector through the CCS (Connectivity & Cloud Solutions) segment. Given its exposure to multiple sectors, the company’s financials are less susceptible to sector-specific weaknesses. Supported by solid financials and healthy growth prospects, it delivered impressive returns of over 240% last year and is up 23.5% year-to-date.
Meanwhile, I expect the financial uptrend to continue, given the rising demand for its high-performance computing switches and storage units due to the increased investments in expanding AI/ML (artificial intelligence and machine learning) data centres. The company’s new product launches and strategic partnerships could also support its financial growth.
WELL Health Technologies
WELL Health Technologies (TSX:WELL) is my second pick. It develops technologies and services to aid healthcare professionals in improving patient outcomes. The demand for its products and services is rising due to the growing usage of software solutions in the healthcare sector, digitization of patient records, and growing adoption of virtual services.
Moreover, WELL Health continues to expand its footprint through strategic acquisitions. Since December, the health tech has acquired seven assets that could contribute $100 million to its annualized revenue and EBITDA (earnings before interest, tax, depreciation, and amortization), in line with its guidance. Further, the company still has 12 letters of intent, which can add another $65 million of revenue annually. Considering these growth prospects and its attractive price-to-sales multiple of 1.5, I expect WELL Health to outperform this year.
Waste Connections
As my third pick, I have chosen Waste Connections (TSX:WCN), an excellent defensive stock. It collects, transfers, and disposes of solid waste and operates primarily in exclusive and secondary markets, thus facing lesser competition and enjoying higher margins. The company has expanded its assets across the United States and Canada through strategic acquisitions, boosting its financials and stock price. Over the last 10 years, WCN has delivered around 490% in returns at a 19.4% CAGR (compound annual growth rate).
Meanwhile, the waste solutions provider continues to expand its assets base through organic growth and acquisitions. It is developing renewable natural gas and recycling facilities, which could become operational in the coming years. Besides, it has adopted innovative approaches toward employee engagement, improving employee retention. Along with these initiatives, increased pricing, adoption of technological advancements to improve efficiency, and acquisitions could continue to drive its financials and stock price.
Enbridge
Enbridge (TSX:ENB) offers impressive dividend payment and dividend growth records. The midstream energy company operates a pipeline network to transport oil and natural gas. It also has an extensive presence in the utility and renewable energy space. With around 98% of its cash flows generated from regulated assets and long-term contracts, Enbridge’s financials are less susceptible to market volatility, allowing it to pay dividends consistently. The company has raised its dividends for 30 years and currently offers an attractive dividend yield of 5.9%.
Further, Enbridge is continuing its $26 billion capital investment plans and hopes to put $6 billion of projects into service this year. The management expects its adjusted EBITDA to come between $19.4 and $20 billion, with the midpoint representing a 10% increase from the previous year. Moreover, the management also expects its 2026 adjusted EBITDA to grow by 7–9%. So, I believe the company is well-positioned to continue its dividend growth, making it an excellent buy.
