5 Canadian Large-Cap Stocks to Buy and Hold for Market-Beating Stability

Are you looking for market-beating stability in the Canadian market? Here are five large-cap stocks that could deliver solid returns ahead.

Canadian large-cap stocks (typically stocks with a market cap over $10 billion) can be considered attractive places to park your cash during times of stock market instability. Large-cap stocks have established businesses and large institutional investors.

As a result, they tend to be a little less volatile than companies with smaller market caps. Just because a large-cap stock has a large market cap doesn’t mean it can’t grow larger. For a mix of stability, growth, and income, here are five major Canadian stocks to hold for market-beating stability.

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A tech giant around the world

With a market cap of $98 billion, Constellation Software (TSX: CSU) is definitely a major Canadian stock to hold for the long term. Despite its size, Constellation is still growing earnings per share and cash flows by nearly 20% a year.

Constellation operates around 1,000 small- and medium-sized specialty software companies around the world. Its business is economically resilient due to the crucial nature of its software services. Likewise, it generates a lot of excess cash that it can readily deploy into cheap acquisitions.

For one of the best-managed companies in Canada, this is one large-cap stock to buy and hold for the long term.

Canada’s largest stock

With a market cap of $227 billion, Royal Bank of Canada (TSX: RY) is Canada’s largest listed company. Royal is not only the largest bank in Canada, but it is one of the best-performing. Its stock is up 84% in the past five years.

Several other major Canadian banks have stumbled in the past few years. This has allowed Royal to take market share and continue to dominate.

The company has a top management team, a great franchise/brand, and a strong, resilient balance sheet. It also pays a growing 3.7% dividend. If you just want a solid company to hold for the long term, it is a good bet.

A safe anchor utility

If you really want to lower the volatility of your portfolio, Fortis (TSX: FTS) is the Canadian stock to hold. It has a market cap of $33 billion.

Fortis operates 10 regulated transmission/distribution utilities across North America. These are some of the steadiest assets a utility can hold. Fortis has +50 years of annual dividend growth under its belt. That record doesn’t look to be slowing. This stock yields 3.7% today.

A top insurance stock

Intact Financial (TSX: IFC) has a market cap of $52 billion. It is the largest property and casualty insurer in Canada. With significant scale, it can offer some of the best rates in the market. As a result, it has effectively grown earnings per share by a nice 10% compounded annual rate.

Intact has other growth opportunities in the U.K. and in specialty insurance. The company is a long-term dividend growth stock and is a nice long-term buy-and-hold stock.

A top infrastructure company

If you want a large-cap stock for some larger dividends, Pembina Pipeline (TSX: PPL) is one to look at. Pembina has a $30 billion market cap. It is one of the largest providers of crucial energy infrastructure in Western Canada.

Almost regardless of the price of any commodity, producers need to get their energy to market. Pembina provides those producers options (whether it be energy processing, propane export, or egress pipelines).

Pembina pays a nice 5.3% dividend yield. It has been growing that dividend in the past few years. That dividend could be complemented by attractive growth as its hallmark LNG export terminal opens in the coming years.

Fool contributor Robin Brown has positions in Constellation Software. The Motley Fool recommends Constellation Software, Fortis, Intact Financial, and Pembina Pipeline. The Motley Fool has a disclosure policy.

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