In the face of uncertainty over the impact of Donald Trump’s imposition of tariffs, the Canadian equity markets have continued their uptrend, with the S&P/TSX Composite Index rising 3.8% this year. The Index is trading just 0.8% lower compared to its all-time high. However, I expect the equity markets to remain volatile as the President of the United States could announce reciprocal tariffs in the coming days. Despite the uncertainty, I am bullish on the following three stocks.
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Waste Connections
Waste Connections (TSX:WCN) collects, transfers, and disposes of non-hazardous solid waste across the United States and Canada. Given the essential nature of its business, the company’s financials are less prone to market volatility. Besides, it operates in secondary and exclusive markets, facing lesser competition and enjoying higher margins. Meanwhile, the company has outperformed the broader equity markets, with its stock price rising 10% year-to-date and 28.6% over the last 12 months.
Moreover, I expect the uptrend in WCN’s financials and stock price to continue due to its solid underlying business and high growth prospects. After a record of acquisitions last year, the company could continue to expand its footprint through strategic acquisitions. Besides, the company is developing several renewable natural gas and resource recovery facilities, which could support its financial growth in the coming years. Further, it has implemented technological advancements to improve operating efficiency and employee safety. Also, the decline in employee turnover amid improvement in employee engagement could support its margin expansion. Considering all these factors, I am bullish on WCN despite the uncertainty.
Fortis
As my second pick, I have chosen another defensive stock, Fortis (TSX:FTS), which serves 3.5 million customers across the United States, Canada, and the Caribbean. It meets the customers’ electric and natural gas needs with a regulated asset base. So, it generates stable and predictable financials, driving its stock price. Over the last 20 years, it has delivered an average total shareholders return of 10.3%, outperforming the broader equity markets. Also, year-to-date, the utility company has returned 4.6% and is up 19.1% over the last 12 months.
Meanwhile, the demand for natural gas and electricity is rising amid growing industrial activity, rapid urbanization, and population growth. The demand growth could drive the need for Fortis’s services. Amid rising demand, the company has planned to invest around $26 billion between 2025 and 2029, expanding its rate base at an annualized rate of 6.5%. Further, its improving operating efficiency and favourable customer rate revisions could also support its earnings growth and dividend payouts in the coming years. Meanwhile, the company’s management expects to raise its dividends by 4–6% annually through 2029, thus making it a compelling buy in this uncertain outlook.
Shopify
Another stock that I am bullish on is Shopify (TSX:SHOP), which is trading 12% higher for this year and is up 40.5% over the last 12 months. Its solid quarterly performances have boosted its stock price. Meanwhile, the company reported its fourth-quarter performance earlier today, with its GMV (gross merchandise volume) growing by 25.7%. Besides, its topline grew 31.2% to $2.8 billion, outperforming analysts’ forecast of $2.7 billion. Also, it was the seventh consecutive quarter of over 25% topline growth. Besides, the company has sequentially expanded its free cash flow margin during all four quarters and has reached 22% in the fourth quarter.
Despite its solid fourth-quarter performance, Shopify’s management has provided a subdued outlook for the first quarter of 2025. The management projects its topline to grow in the mid-twenties. Its investments in developing artificial intelligence-powered tools appear to have weighed on its operating expenses, with management expecting its operating expenses in the first quarter to rise to 41–42% of the total revenue compared to 31.5% in the fourth quarter. However, I believe the growing adoption of omnichannel commerce platforms has created long-term growth potential, making Shopify an excellent buy.
