Finding top Canadian stocks investors can buy and hold in this period of market uncertainty isn’t necessarily an easy feat. Indeed, the Canadian economy does have some potential tailwinds in the form of less domestic uncertainty after the recent election results came through.
But the reality for most investors is that trying to gameplay out how the global geopolitical climate will adapt over time is where the real money will be made. If Canada can come away from this ongoing tariff fiasco in a decent place and manage to build homes and bring more economic development on an intra-provincial level, then there’s a lot to like about where some Canadian stocks are currently valued.
Here are two top Canadian stocks I think provide excellent value for long-term investors and may be worth buying amid this recent bout of uncertainty.
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Suncor
One of the sectors of the Canadian economy I expect will mostly remain outside of the purview of U.S. trade policy is the energy sector. In this space, Suncor (TSX: SU) remains a top player in bringing crude oil from Western Canada to both domestic and foreign (mostly U.S.) customers.
This energy giant has seen strong share price appreciation over the past year. And despite the move investors will note above, the company’s stock still trades at around 10 times earnings. That’s some serious value for a company that continues to spit off significant cash flows (even holding oil prices where they are) and even greater value when one considers the 4.5% dividend yield SU stock pays out.
For long-term investors bullish on the energy independence movement and who feel that long-term supply and demand imbalances will ultimately lead to stable prices (likely higher than where they are today), this is a stock that looks well-positioned to continue to provide annual returns in the double-digit range for the foreseeable future.
Of course, anything can happen, and oil prices remain volatile. But given where Suncor trades in terms of its valuation compared to other energy majors, this stock looks very attractive currently — at least, that’s my view right now.
Fortis
Fortis (TSX: FTS) is a top Canadian utility giant, providing natural gas and electricity to millions of customers across Canada, the U.S., and other Caribbean nations.
I’ve highlighted Fortis as one of the most stable and defensive options in this market. And to a great extent, the market appears to agree with my view.
Like other utility stocks that have benefited from surging demand expectations for future electricity usage (ahem, thanks, artificial intelligence), Fortis has been a strong performer in recent years. I think the company’s underlying demand trends should remain in place. And given how stable the company’s capital investment profile has been, cash flow growth over time does look promising.
Fortis’s ability to grow its cash flow at an outsized rate has allowed the company to continue to pass on greater value to shareholders year in and year out. In fact, for the past 51 years, Fortis hasn’t missed an opportunity to raise its dividend distribution.
Accordingly, I view Fortis as among the best defensive dividend stocks (with a current yield of around 3.5%) in the market, which also carries significant capital appreciation potential as well. In terms of all-around individual stocks worth buying in this market, Fortis continues to be near the top of my buy list at present.
