TFSA (Tax-Free Savings Account) investors who seek a great night’s sleep should insist on some of the less-corrected defensive dividend stocks and REITs (real estate investment trusts) as tariffs and other worries send a shockwave of turbulence across Canadian markets. Indeed, perhaps the TSX Index’s chances of topping the hot S&P 500 will be lower than thought if Trump tariffs do come to be before the second half of the year. In any case, you don’t need to double down on the stocks with elevated amounts of tariff risk. Sure, you could get a robust long-term winner on the cheap if you brave the tariff threats.
However, if you’re unsure about how bad tariffs could get or you’ve already got enough risk associated with the other Canadian stocks in your portfolio, perhaps derisking with some of the lower-beta bets could make a lot of sense. In this piece, we’ll look at two passive-income options that may be worth watching in March as we learn more about Trump tariffs and how they’ll affect the Canadian economy throughout the year.
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Dollarama
Dollarama (TSX:DOL) is a discount retailer to watch closely in March. With less tariff-related impact than some of the other Canadian retailers, most notably those that import a great deal of goods from the U.S., Dollarama stands out as a great place to hide.
It’s not just the limited tariff impact, though; the discount retailer also stands to gain more foot traffic as Canadians look to go the extra mile (let’s say to the Dollarama versus the local high-end organic grocer) to save several dollars on their shopping trip. Sure, Dollarama won’t be insulated from any broad inflation caused by potential retaliatory tariffs. However, I still view the company as a relatively steady ship for a patch of waters that could be a lot choppier if tariffs are thrown in.
Over the last year, the stock is up 36% — a solid gain for a Canadian retail play. More recently, however, the stock has slipped around 8%. I think this dip is a chance to buy, even if the company didn’t have the best third-quarter earnings result in the world. With a new $500 million logistics hub in Calgary and a more aggressive long-term store expansion plan in place, DOL stock, I think, has the narrative in place to warrant its hefty 35.5 times trailing price-to-earnings (P/E) multiple.
Barrick Gold
Gold has been on a huge melt-up in recent months, and it’s not a mystery why. Gold miners like Barrick Gold Corp. (TSX:ABX) could be better ways to play the continued shine in the precious metals going into the year’s end. Year to date, ABX shares are up over 10% — an impressive run for a firm that appears to be making up for lost time.
The stock is still off around 35% from its all-time highs. With a modest 14.6 times P/E multiple and a generous 2.33% dividend yield, I’d not sleep on the relative value play for gold investors looking for cheaper ways to hedge their portfolios. With a 0.48 beta, the stock may hold up on those difficult days for the broad markets.
