After rising 1.5% last month, the S&P/TSX Composite Index has continued its uptrend, rising 2.3% month to date. Investors’ optimism that the Federal Reserve of the United States would cut interest rates next month and solid second-quarter performances from Canadian companies have driven the equity markets higher.
However, the uncertainty surrounding the impact of protectionist policies on global economic growth persists. Therefore, if you are also worried about the substantial increase in the equity markets over the last few months and the uncertain outlook, you can buy the following two Canadian stocks that can deliver in any environment.
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Dollarama
Dollarama (TSX: DOL) is a discount retailer that operates 1,638 stores across Canada. Its superior direct-sourcing and buying capabilities and efficient logistics have allowed the company to deliver compelling value to its customers, thereby enjoying healthy sales even during a challenging macro environment. The Montreal-based discount retailer expects to expand its footprint to 2,200 stores by the end of fiscal 2034. Given its capital-efficient growth-oriented model, quick sales ramp-up, and lower store network maintenance capex requirement, these expansions could support not only its topline growth but also boost its bottom line.
Additionally, Dolalrama acquired The Reject Shop last month, thereby venturing into the Australian retail market. The Reject Shop currently operates 390 stores across Australia and generates an annual revenue of around $780 million. Further, Dollarama owns a 60.1% stake in Dollarcity, which operates 644 stores across Latin America. Dollarcity is also expanding its store network and aims to raise its store count to 1,050 by the end of fiscal 2031. Also, Dollarama can exercise its option to increase its stake in Dollarcity to 70% by the end of 2027. Considering all these factors, I expect the uptrend in Dollarama’s financials to continue, irrespective of the macro environment, making it an excellent buy.
Waste Connections
Another Canadian stock that I expect to perform irrespective of the broader market conditions is Waste Connections (TSX: WCN), which collects, transfers, and disposes of non-hazardous solid wastes. Last month, it reported a healthy second-quarter performance, with its top line growing by 7.1% to $2.41 billion. Along with a 6.6% increase in solid waste core pricing, the acquisitions over the last four quarters have driven its revenue growth. Meanwhile, its adjusted net income stood at $333.1 million or $1.29 per share, representing a 4% increase from the previous year’s quarter. Its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) grew 7.5% to $786.4 million, while adjusted EBITDA margin improved 10 basis points to 32.7%.
Moreover, WCN has completed several acquisitions this year that can contribute around $200 million to its annual revenue. Given its solid financial position and free cash flow generation, the company’s management expects to continue with its acquisition activities. It is constructing 12 renewable natural gas facilities that could become operational next year. Once fully operational, these facilities could contribute $200 million to its adjusted EBITDA. Along with these growth initiatives, its adoption of technological advancements, employee safety measures, and enhanced employee engagement could boost its financials in the coming years.
Meanwhile, after reporting its second-quarter performance, WCN’s management raised its 2025 guidance, with its revenue and adjusted EBITDA guidance representing 5.9% and 7.5% growth from the previous year. Its adjusted free cash flow of $1.3 billion represents a 6.7% year-over-year increase. Considering all these factors, I believe WCN would be an excellent defensive bet.
