It’s hard to find any hint of momentum these days, with the Nasdaq 100 tanking into correction territory in what was a terrible Monday for markets. Indeed, as the market bloodbath continues as fears over Trump tariffs grow, questions linger as to whether the stock market is expensive anymore. Indeed, the TSX Index, which I found quite cheap when it was hovering close to its all-time highs, has become that much cheaper.
Though it could get even cheaper if Canada’s economy is propelled into a recession, perhaps a longer-lived structural one, I think that those with cash on the sidelines should seek to put it to work (gradually, very gradually) over the coming months and quarters. Indeed, cheap stocks can get cheaper at a time like this, when panic is in the air. Either way, for those looking for relative value and a bit of momentum, the following trio, I believe, could be worth watching closely.
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Fortis
Perhaps it’s not all too surprising to learn that Fortis (TSX: FTS) is faring well now that volatility has made its dreaded return. At just shy of $65 per share, I still view FTS shares as a cheap way to do well as the economy takes a couple of jabs at the hands of tariffs. The stock is near an all-time high, and its share price momentum from the back half of last year, I believe, could continue, even if the TSX Index and S&P 500 sink from here.
The beta is at a low 0.24, meaning shares aren’t as influenced by moves made in the broad markets. As a stable, highly regulated utility with a steady dividend growth rate, I’d not sleep on shares while the yield sits at a still-generous 3.83%. The stock rose by more than 1% on a brutal Monday for stocks.
Hydro One
Hydro One (TSX: H) is another one of those rare green stocks in a market-wide sea of red, rising 1.3% on Monday’s painful sell-off session that saw the Nasdaq 100 crash by around 4% at its intraday worst. Indeed, as the hot artificial intelligence stocks take a hit, H shares have been surging higher.
Now up 15% in the past year, I view the stock, which is at all-time highs, as a great defensive dividend stock to help your portfolio deal with the choppiness that’s coming. With a 0.35 beta and a 2.66% dividend yield, H stock makes for a relatively smooth ride.
Loblaw
Finally, Loblaw (TSX: L) stock is another momentum stock that couldn’t be bothered by recent tariffs woes. At $192 and change, shares go for a premium 27.6 times trailing price to earnings (P/E). However, given its role as a grocery market share-taker and its ability to do well in wobbly markets (0.1 beta, which is even lower than the two utility stocks mentioned in this piece). The 1.1% dividend yield is just a cherry on top of the sundae.
So, if you’re looking to play defence, perhaps it’s time to buy shares as they hover close to their highs.
