Market volatility appears to be King of the market lately. Fueling that volatility is the on-and-off discussions and increasing battle of words relating to tariffs. This not only leaves both the U.S. and Canada and their integrated economies in unchartered waters but also investors opting to buy now for stability.
But where exactly should investors turn to buy now for stability? Fortunately, the market is full of great Canadian defensive stocks to consider.
Here’s a look at a trio of options to consider for your portfolio.
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Option 1- Fortis
Fortis (TSX: FTS) is a great defensive pick to buy now for stability. Most investors recognize the stock as one of the largest utility stocks on the market. Fortis boasts operations in the U.S. and Canada, as well as in the Caribbean, across 10 operating regions.
One of the reasons why utilities like Fortis are such great defensive picks comes down to the lucrative business model that they offer.
In short, utilities are bound by long-term regulated contracts to provide utility services, for which they are compensated. In the case of Fortis, this translates into a recurring revenue stream for as long as Fortis continues to provide that service.
That revenue stream also boasts significant defensive appeal, making the stock a prime candidate for investors looking to buy now for stability. That’s because utility service is a necessity, and unlike other services, cannot be traded down.
More importantly, Fortis’ reliable revenue stream allows the company to invest in growth initiatives while also paying out a healthy quarterly dividend. As of the time of writing, that yield works out to a very tasty 3.8%.
Prospective investors should also note that Fortis has provided annual upticks to that dividend without fail for over 50 consecutive years. Fortis plans to continue that tradition, making this an ideal buy-and-forget stock for any portfolio.
Option 2 – Alimentation Couche-Tard
Another option for investors looking to buy for stability is Alimentation Couche-Tard (TSX: ATD). Couche-Tard is one of the largest convenience store and gas station operators on the planet.
Gas stations and convenience stores are incredibly defensive investments, even if they don’t appear that way, at least initially. That’s because like Fortis, Couche-Tard offers a necessary service to its customers. Even when the market is down, people will still need to gas up their cars.
Adding to that appeal is Couche-Tard’s approach to growth. The company has a near insatiable appetite on expansion, completing a series of increasingly larger acquisitions over the years. The company has also developed a knack for integrating newly acquired brands, realizing significant synergies. Couche-Tard is also known for its expansive EV network, which it continues to build out in both Europe and North America.
The result is Couche-Tard is now operating in over two dozen countries around the world with an impressive network of over 9,200 stores in Canada and the U.S. alone. That fact alone makes Couche-Tard a unique option for investors looking to buy now for stability.
But that’s not all. The latest M&A target for Couche-Tard is Japan-based Seven & i, the owner of the 7-Eleven brand, which is the largest convenience store operator on the planet. The latest approach for the company included a whopping US$47 billion offer.
The acquisition would be a key growth driver for Couche-Tard, which has a strong network in Europe and North America, but a smaller footprint in Asia. 7-Eleven, on the other hand, has a strong network in Asia.
The stocks to buy now for stability belong in your portfolio
No stock, even the most defensive is without some risk. Fortunately, Couche-Tard and Fortis offer investors a highly defensive moat and stellar growth potential.
In my opinion, one or both of these stocks should be core holdings in any well-diversified portfolio.
Buy them, hold them, and watch them grow.
