As the trade war between Canada and the U.S. continues to intensify, TSX investors are facing heightened uncertainty and market volatility. With new tariffs targeting key Canadian sectors, including a 25% levy on most Canadian imports and a 10% tariff on energy exports, industries that rely on cross-border trade could see big headwinds in the coming months. At the same time, Canada’s $155 billion in retaliatory tariffs could add further economic worries.
For investors seeking protection from trade-related volatility, fundamentally strong stocks that flourish even amid economic slowdowns could be worth considering right now. In this article, I’ll talk about two such safe stocks on the Toronto Stock Exchange that could serve as safe havens during these uncertain times.
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Dollarama stock
The first safe stock that comes to mind is Dollarama (TSX:DOL), Canada’s top discount retailer. No matter the economic climate, shoppers continue to trust Dollarama for affordable everyday essentials and seasonal products, making it a resilient stock choice for uncertain times.
Over the past 10 years, DOL stock has skyrocketed 580%, rewarding long-term investors with handsome returns. Currently, the stock trades at $137.53 per share, with a market cap of $38.3 billion. Interestingly, Dollarama has an outstanding track record of yielding positive double-digit returns in 14 out of the previous 15 years.
In its latest quarter ended October 2024, the company posted a 5.7% YoY (year-over-year) sales increase to $1.6 billion, fueled by a 3.3% rise in comparable store sales and continued store expansion. Similarly, its adjusted net quarterly profit rose 5.6% from a year ago to $275.8 million, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed 6.5% YoY to $509.7 million.
And Dollarama’s growth story isn’t over yet. Recently, its management raised its long-term store target to 2,200 locations by 2034 and plans to build a logistics hub in Western Canada to improve operations. With strong financials, steady expansion, and a recession-resistant model, Dollarama could be a solid safe haven for investors in tough times.
Waste Connections stock
Another Canadian stock that could provide stability amid trade war uncertainty is Waste Connections (TSX:WCN). As one of the top North American waste management companies, this Woodbridge-based firm mainly focuses on non-hazardous waste collection, transfer, and disposal services across 46 U.S. states and six Canadian provinces. Given its essential nature, the business remains resilient regardless of economic conditions and trade uncertainties.
WCN stock currently trades at $267.05 per share, with a market cap of $68.9 billion. Over the past year, the stock has surged nearly 28%, outperforming the broader market.
In the third quarter of 2024, the company’s total revenue rose 13.3% YoY to US$2.3 billion, while adjusted EBITDA saw a solid 17.3% YoY jump to US$787.4 million. These strong results encouraged its management to raise its full-year 2024 guidance, with expectations of $8.9 billion in revenue and $2.91 billion in adjusted EBITDA.
Beyond its strong fundamentals, Waste Connections is also aggressively expanding through quality acquisitions. In addition, this safe stock could also benefit from surging demand for waste services, making it a defensive stock pick for long-term investors.
