We saw a rather abrupt (and quickly resolved) correction in the TSX, with Canada’s top index declining more than 10% on a year-to-date basis through early April. However, many stocks have weathered this storm well, with a number of top Canadian equities having continued to rally through the turmoil and come through this latest rough patch ahead.
At the time of writing, the stock market is actually up for the year, so there’s no correction to speak of. But given the amount of uncertainty in the market, investors won’t likely be remiss to skip out on some of the potential gains higher-growth stocks can provide and settle down in more defensive value stocks.
For those looking to do just that, here are two of the most resilient Canadian stocks that I still think provide excellent upside potential as investors look through this near-term market turmoil.
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Restaurant Brands
Tim Hortons’s parent Restaurant Brands (TSX: QSR) did register a dip of around 10% during the period of tariff-driven turmoil most investors would like to forget. Indeed, the company’s stock chart does resemble that of the market over the past few months, with the stock posting a year-to-date return of around 5% at the time of writing.
That said, I think this resilience (like what was seen with the TSX overall) is worth considering for investors looking to add defensive portfolio exposure right now. The company’s core fast-food offerings (which also incorporate banners such as Burger King, Popeyes, and Firehouse Subs, among others) are inherently defensive from potential market downturns.
As we’ve seen in other recessionary environments, folks still choose to eat out when their budgets are strapped. They just do so at the lowest-price restaurants, with many tending to opt for the greatest convenience, fastest service and lowest prices out there.
I’d argue that Restaurant Brands’s portfolio of banners is among the best in this space and the most diversified. Thus, for those looking to take a bite out of the quick-service restaurant space, this would be my top pick worth considering right now.
Manulife
Another top-value stock I continue to believe will be a long-term winner is Manulife (TSX: MFC).
The Canada-based insurer has seen incredibly robust share price growth in the face of some rather considerable headwinds of late. A loss related to the sale of debt securities via a reinsurance transaction in the U.S. and increased provisions for credit losses did translate into a rather significant decline in earnings this past quarter of nearly 50%.
However, investors have seemingly looked past these issues, deciding instead to focus on Manulife’s status as a leading insurer with a rock-solid balance sheet as a key reason to own this name.
With a valuation of just 16 times trailing earnings, this is a company I think still provides excellent long-term value. And that’s not even taking into consideration Manulife’s 4.2% dividend yield.
For investors looking for resilient long-term holdings worth buying now, these two companies are worth keeping on the radar, in my view.
