3 Canadian Stocks so Safe I’d Tell My Mother to Buy Them

Looking for a simple, family‑friendly portfolio? Fairfax, Constellation, and Hydro One combine value, long‑term compounding, and steady utility income for retirees.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published September 26, 2025 4:50 pm EDT

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Key Points

Fairfax offers deep value, strong Q2 earnings, and rising book value, backed by an insurance float and value-focused management.
Constellation is a high‑quality compounder with 15% revenue growth and strong cash generation despite leadership changes and earnings swings.
Hydro One provides predictable, regulated income, but high debt and heavy capex mean you should monitor financial risks.

It’s likely a given that when you get into the investment world, you start making recommendations. Plus, you’ll have family and friends asking you about what to invest in. Frankly, I do get this quite a bit, but I try not to give investment advice to specific individuals. That’s because I don’t know their situation or goals, and it’s always best to do some research and then meet with a financial advisor.

Yet when it comes to my family, I’m pretty good at knowing goals. That’s why when my mom or dad ask me about investing, I can give a clearer picture. That picture for them involves growth over a few years and dividend support – cash that can compound fairly quickly in their retirement and support long-term health plans. So when it comes to investing under this scenario, these are the top Canadian stocks I usually recommend.

Senior uses a laptop computer — Source: Getty Images

FFH

First, pretty much no investor can go wrong with Fairfax Financial Holdings (TSX:FFH). First off, here’s why it looks like a safe investment. Most recently, FFH stock reported very strong second quarter results, with net earnings rising to US$1.44 billion, and book value per share up 10.8% year-to-date. Its underwriting also showed strengths, with profit continuing to rise. And frankly, that’s unlikely to change given its large investable insurance float offers a diversified investment portfolio.

And the company continues to invest well under Prem Watsa, Canada’s own Warren Buffett who focuses strictly on value. Yet even with all this positivity, valuations remain reasonable. The Canadian stock trades at just 9 times earnings and 10 times forward earnings. Therefore, it’s certainly inexpensive for a diversified insurance and investment group. Investors will have to watch its underwriting profit trends, realized and unrealized investment gains, and any large losses. But honestly, it’s a strong Canadian stock that long-term value investors have already seen work for them for years.

CSU

Then there’s Constellation Software (TSX:CSU), which is looking even more valuable recently. This came after the company recently stated that its founder would be stepping down for health reasons. President Mark Leonard has been a legendary investor for the company and its spin offs, and this left some investors fearful about what the future might hold. The thing is? This is a strong company with a durable portfolio acquiring niche-software. And given its ability to spin out to other companies on a global scale, this isn’t going to change even with Leonard stepping back.

In fact, during the second quarter, the Canadian stock saw revenue rise 15% year over year, with continued strong organic growth and acquisitions. It continues to provide excellent cash generation and has proven to be a compounding franchise with recurring revenue from its vertical software. Of course, this can come with net income swings, seen recently as well, along with total debt. But that comes with the territory. For now, it’s a high-quality long-term compounder looking even more attractive after a recent dip in share price.

H

Then there’s something simple and defensive in nature, and that’s utility stock Hydro One (TSX:H). There’s a lot going for this Canadian stock, and none of it is exciting. Which is why I have no problem recommending it. The Canadian stock is a regulated utility with predictable, rate-regulated cash flow and stable earnings. This was seen in the second quarter with earnings per share (EPS) improving and stable demand continuing this trend.

Now the company has reported high debt at $18.1 billion and a debt-to-equity (D/E) of 145% at writing. But that’s typical for utilities thanks to high capital spending. Even amidst this, the Canadian stock manages to support its yield with a 61% payout ratio at writing. This provides a solid buffer while the company pays down debts. All considered, it’s a strong core investment for income and slow and steady growth.

Bottom line

Together, these three provide a solid base for my family’s portfolio. We have FFH, with attractive valuations and a solid income stream, CSU for long-term compounding, and H for stable cash flow. The only thing I’d tell my mom? Make sure to watch any company-specific triggers. Yet overall, this is a strong portfolio for long-term investors looking to create some income during retirement.