When the stock market faces periods of uncertainty and volatility, it’s natural for investors to feel hesitant. Whether it’s concerns about inflation, interest rates, political instability, or a trade war, the fear of short-term losses can often cloud long-term thinking and make it difficult for investors to decide what the best Canadian stocks to buy are.
However, while these short-term disruptions can feel overwhelming at the time, history has shown that they’re almost always temporary. That’s why some of the best times to buy high-quality stocks are when the market is selling off.
Not only can you buy high-quality companies trading at a discount, but you can also position yourself for significant long-term gains once the uncertainty clears.
Of course, it’s important to focus on the right types of businesses. The best stocks to buy in these situations are ones that are fundamentally sound, with strong operations, robust balance sheets, and long-term growth potential.
So, if you’re looking to put cash to work as markets fall, here are three of the best Canadian stocks to buy on the dip today.
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A top defensive growth stock
If you’re looking for stocks to buy as uncertainty and volatility pick up, finding a reliable and defensive business is your best bet. And while there are a handful of sectors that offer defensive stocks, one of the most essential industries to invest in is the waste management sector.
That’s why one of the best Canadian stocks to buy on the dip is GFL Environmental (TSX: GFL).
GFL Environmental is a perfect example of a stock that’s not only reliable and defensive but also offers significant long-term growth potential.
GFL operates across Canada and the United States, offering essential environmental services like waste management that remain in demand regardless of the economic environment. That makes GFL’s revenue more stable than many other businesses, even when consumers and companies are tightening their spending.
However, what makes GFL particularly compelling is that, despite being in a defensive industry, the company still offers investors plenty of long-term growth potential. In fact, GFL has grown rapidly through both acquisitions and organic expansion over the last few years, making it one of the best Canadian stocks to buy and hold for the long haul.
One of the best financial stocks that Canadian investors can buy and hold long term
Another strong long-term stock to keep your eye on, should markets continue to worsen, is Brookfield Asset Management (TSX: BAM).
Brookfield is one of the most trusted names in global asset management, with a focus on alternative investments such as infrastructure, real estate, and renewable power.
These types of assets are typically less correlated to broader market volatility, offering investors more stability. Furthermore, Brookfield earns consistent fee-based revenue from managing these assets, making its business highly scalable and dependable.
Despite its defensive nature and global diversification, Brookfield’s share price has still declined recently and could fall even further if markets continue to decline due to the ongoing trade war.
Therefore, if you’re looking for the best Canadian stocks to buy undervalued in this uncertain economic environment, Brookfield Asset Management is undoubtedly a top candidate.
One of the best Canadian dividend stocks
In addition to Brookfield and GFL, another high-quality Canadian stock you’ll want to buy while it’s undervalued is Enbridge (TSX: ENB).
Enbridge is a top holding in many Canadian investors’ portfolios, and for good reason. The energy infrastructure giant owns and operates one of the largest networks of oil and gas pipelines in North America, making it a vital part of the continent’s energy supply chain.
Furthermore, because its revenue is primarily generated through long-term contracts and regulated assets, Enbridge’s cash flow is highly predictable. This allows the company to pay a stable and growing dividend, which currently yields just shy of 6%.
While energy prices can be volatile, Enbridge is somewhat insulated from that volatility because it doesn’t rely on commodity prices for its earnings. That makes it far more defensive than traditional energy producers.
Therefore, if Enbridge were to sell off significantly, should this trade war persist, it’s easily one of the best Canadian stocks to buy while it’s undervalued and hold for the long term.
