Trying to predict which Canadian companies could outperform over any short-term time frame is a difficult task. Indeed, market sentiment continues to shift quickly on a seemingly daily basis. And with so much geopolitical turmoil right now, there’s good reason to believe that this volatility could continue for some time to come.
That said, I think there are some structural trends underpinning the recent moves in the market that are worth exploring. These two companies look perhaps best positioned to take advantage of these trends for the remainder of 2025 and remain top picks in my books due to their status as top value stocks in defensive sectors right now.
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Manulife
For investors looking at sectors that could be less exposed to the tariff concerns and geopolitical turmoil that has ravaged the Canadian stock market thus far in 2025, Manulife (TSX: MFC) looks like a relatively good place to hide out right now.
The Canadian insurance giant has seen very robust growth over the course of the past year. And while this stock is down considerably from its January peak, there’s reason to believe that many long-term investors will continue to look to a company like Manulife as a relative safe haven in this current macro backdrop.
Importantly, Manulife has significant exposure to the Chinese market and other high-growth markets abroad, in addition to a strong portfolio domestically. With Canadian investors likely to come back home toward companies that are centred in Canada, I can see a strong bull case building behind Manulife from domestic capital flows alone.
Additionally, the company’s rock-solid business model and portfolio of long-duration assets should benefit from lower interest rates. With interest rates coming down faster in Canada than in many jurisdictions abroad, this is a top insurance stock I think is being overlooked right now — particularly at its valuation multiple of just 14 times trailing earnings.
Fortis
Another top dividend stock I view as a relative value play in this current market is Fortis (TSX: FTS). While Fortis has seen its valuation expand considerably of late, this is still a company that trades at roughly 20 times earrings. Compared to where many stocks are trading in this environment, that’s not expensive by any stretch of the imagination.
When investors factor in a dividend yield of 3.6%, as well as the company’s 51-year track record of raising its dividend distribution, this story becomes even more clear as to why investors continue to gravitate toward this name.
For investors who think interest rates are likely to be on the decline in the years to come (and the Bank of Canada has been among the most aggressive central banks in cutting rates), Fortis is a top-tier dividend knight that’s worth buying on any dips moving forward, in my view.
