This year, the Canadian equity markets have been under pressure amid the ongoing trade war and uncertainty over its impact on global economic growth. The S&P/TSX Composite Index is down 4.1% year-to-date. However, despite the uncertain outlook, the following three stocks have delivered solid returns this year and could continue to outperform, thus making them excellent buys in this uncertain outlook.
Dollarama
Dollarama (TSX:DOL), a Canadian discount retailer, has delivered impressive returns of 19.4% this year amid solid performances and growth initiatives. Its topline grew 9.3% in the fiscal year 2025, with its same-store sales rising by 4.6%. Compelling value offerings across its broad assortment of customer products continued to attract customers despite the challenging macro environment, boosting its same-store sales. The discount retailer opened 65 new stores during the fiscal year, raising its store count to 1,616.
Further, the company’s EBITDA (earnings before interest, tax, depreciation, and amortization) grew by 14%, while its EBITDA margin expanded from 31.7% to 33.1%. Amid its solid cash flows, the company repurchased 8.1 million shares for $1.1 billion, lowering its outstanding share count and driving its EPS (earnings per share). Its diluted EPS grew by 16.9% to $4.16.
Moreover, Dollarama continues to expand its footprint and expects to increase its store count to 2,200 over the next nine years. The company also has a healthy presence in Latin America through its subsidiary, Dollarcity. Meanwhile, Dollarcity has planned to add another 418 stores over the next six years, raising its store count to 1,050 by the end of the fiscal year 2031. Further, Dollarama is working on acquiring The Reject Shop for $233 million, which could expand its presence in Australia. Considering its growth prospects and solid financials, I expect Dollarama to deliver superior returns in the long run.
Waste Connections
Second on my list is Waste Connections (TSX:WCN), which has returned 10.3% year-to-date. The waste solution provider’s solid underlying business, continued acquisitions, and healthy growth prospects have strengthened investors’ confidence, driving its stock price. Its topline grew by 11.2% in 2024 , while adjusted net income increased by 14.6%. The improvement in employee engagement and retention and the continued integration of acquired entities boosted its financials. Besides, the company generated $2.2 billion of cash from its operating activities and $1.2 billion of free cash flows.
Fortis
Fortis (TSX:FTS), which has returned over 11% year-to-date, would be my final pick. Given its highly regulated and low-risk utility business, its financials are less prone to broader economic cycles, thus delivering stable and predictable financials and cash flows. Further, investors’ optimism that falling interest rates could lower its interest expenses and drive its profitability has supported its stock price growth.
Moreover, Fortis plans to invest around $26 billion to grow its rate base by $14 billion to $53 billion by 2029, representing an annualized growth rate of 6.5%. With the company expecting to generate around 70% of these investments from internal operations and a dividend reinvestment plan, these investments would not substantially raise its debt levels. Also, favourable rate revisions and improved operating performances could support its financial growth in the coming years. Amid these healthy growth prospects, Fortis’s management expects to raise its dividends by 4–6% annually through 2029. Considering all these factors, I believe Fortis could outperform in this uncertain outlook.
