Canadian investors should strive to add dividend stocks that they can count on amid market turbulence. Indeed, the defensive dividend stocks with lower betas may be able to hold up through the nastiest of corrections, but they don’t tend to deliver the best of long-term returns. Indeed, think of the low-beta sectors out there, like utilities, consumer staples, and all the sort, that don’t exactly top the list of high-returning names in the midst of a bull market.
As the bear returns, though, such names stand to take on less damage while the highest flyers begin to fall back to Earth. Though a correction isn’t a certainty for 2025, I think we live in some uncertain times, with tariff threats and the potential for inflation to weigh on our wallets again as it did two years ago.
Here are two Steady Eddie dividend payers that make sense to pick up if you’re looking to beef up your defences.
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Loblaw
Loblaw (TSX: L) isn’t the highest yielder out there (1.15% yield), but it’s still a reliable defensive with a dividend that’s poised for above-average growth. At the time of writing, shares of Loblaw are fresh off a nearly 30% rally over the past year. With earnings up ahead and plans to help Canada brace for tariffs, L stock is sure to be an eventful name moving forward. If shares sag even further after their recent correction, I’d not be afraid to jump in as a buyer. Recession, inflation, or a combination of the two, Loblaw has a plan to keep swimming forward. The company is aiming to open 80 stores this year as a part of its longer-term investment plan.
With a very strong past five years of gains (up 156%), I wouldn’t sleep on the name as it doubles down on value-rich private-label banners such as No Name. With a slew of No Frills and No Name stores popping up, Canadians will have a place to shop if they’re looking to save big money. Perhaps Loblaw could give discount retail a good run for its money in the next five years as it jolts its dividend-growth prospects.
Fortis
Fortis (TSX: FTS) is a solid defensive dividend utility stock that recently posted some pretty decent numbers. With the company aiming to grow its dividend by 4-6%, it’ll need to make smart, disciplined investments in the right areas. It appears the firm is on the right track and won’t be derailed even if a recession were to hit tomorrow. The company’s ITC actually surged 7% in the latest quarter, a remarkable result that could help FTS power a rally to new all-time highs in the coming weeks and months.
Like Loblaw, the company has a five-year plan and one that could really jolt the dividend. At just 19.2 times trailing price to earnings (P/E) with a 3.97% dividend yield, FTS is a name to keep watch of as the TSX Index looks to stumble into March, as tariffs potentially look to come into effect. In short, Fortis is a sleep-easy dividend stock you can hang onto in good times and bad.
