The market has been ripping higher over the past few weeks, trading off of a tariff-related low most markets around the world experienced in April. That’s been great news for investors in a range of growth stocks, as many of the top defensive stocks that caught a bid following this recent bout of turmoil come back down to earth.
The thing is, there are plenty of investors out there who don’t believe the turmoil is over. Far from it. And for those investors, staying consistent in holding certain defensive stocks is a strategy that makes sense to pursue, at least from a sleep-well-at-night perspective.
For those looking to do just that, here are two top defensive Canadian stocks I think are worth considering right now.
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Restaurant Brands
As far as top Canada-based defensive stocks are concerned, Restaurant Brands (TSX: QSR) once again makes my short list.
The parent company of a host of fast food banners – from Canada’s favourite Tim Horton’s to Burger King, Popeye’s, Firehouse Subs and others – Restaurant Brands continues to generate strong cash flows from its core business. And while same-store sales growth has slowed somewhat, the company is still seeing growth thanks to its international expansion strategy, which is paying dividends (figuratively and literally).
The 3.5% yielding stock is one of my top picks for investors seeking strong total returns over the long haul. And while capital appreciation upside has been relatively steady for those who have stuck with this name (albeit on a bumpy ride higher), it’s true that Restaurant Brands’ valuation is more attractive today than it has been in some time. For me, that’s good enough, and this defensive stock continues to remain high on my buy list as a result.
Toronto-Dominion Bank
Moving toward the banking sector, Toronto-Dominion Bank (TSX: TD) stands as one of the premier Canadian banks providing investors with diverse exposure to a range of banking services its peers may not provide, at least not to the same quality standard.
This top Canadian bank has seen ample growth over the long-term, and looks poised to make another all-time high from here. A long-term pick of mine as a bank that’s historically provided one of the best returns on capital in its space, TD remains an excellent option for Canadian investors looking for exposure to international markets. The company’s focus on a strong and growing retail banking presence in the U.S. has paid off handsomely, with many of the company’s acquisitions and expansions into this market taking place at the right time.
Of course, we’ll have to see how the global landscape shapes up, and there are still domestic issues to be hammered out. But for those seeking reliable double-digit returns over the long-haul (with a good portion of these returns coming thanks to the company’s 4.7% dividend yield), this is a stock to consider right now.
