Amid interest rate cuts and healthy quarterly performances, the Canadian equity markets have witnessed healthy buying this year, with the S&P/TSX Composite Index rising by 20.3%. The recent surge in equity markets and the potential effects of the trade war on global growth are causes of concern. Meanwhile, the following three defensive stocks, which can deliver consistent returns irrespective of broader market conditions, would help you strengthen your portfolio.
Source: Getty Images
Waste Connections
Waste Connections (TSX: WCN) offers waste management services, including the collection, transfer, and disposal of non-hazardous solid waste in the secondary and exclusive markets of the United States and Canada. Therefore, it faces less competition and enjoys higher margins. Backed by the essential nature of its business and strategic expansion through both organic and inorganic initiatives, the Toronto-based waste management company has delivered strong financial growth, which has supported its stock price appreciation.
Over the last five years, it has acquired over 100 assets, which have contributed approximately US$2.2 billion to its annual revenue. Driven by its solid financial performance, the company has returned 445% over the last 10 years at an annualized rate of 18.5%. Considering its solid financial position and healthy cash flows, WCN’s management expects to continue with its acquisitions, supporting its financial growth. Additionally, the adoption of technological advancements, enhanced employee engagement, and improved safety parameters could boost its profitability. Thus, I anticipate WCN’s financial growth to remain resilient despite market volatility, allowing it to deliver strong returns in the years ahead.
Dollarama
The second Canadian stock that I believe can deliver reliable returns, irrespective of the broader market conditions, is Dollarama (TSX: DOL). The Montreal-based retailer has implemented an efficient direct-sourcing model that removes intermediaries and enhances its bargaining power. Coupled with robust logistics, this approach has reduced costs, enabling the company to offer a range of consumer products at competitive prices, which in turn allows it to sustain strong sales even amid a challenging macroeconomic backdrop.
Additionally, Dollarama is expanding its footprint, with plans to grow its store count to 2,200 by fiscal 2034, up from 1,665 at the end of the second quarter of fiscal 2026. Besides, it recently acquired The Reject Shop, which operated 395 discount stores in Australia. Additionally, the company is optimistic about expanding its store network in Australia to 700 by the end of 2034. Along with these expansions, I expect the increased contribution from its 60.1% stake in Dollarcity to continue supporting its financial growth in the coming years, thereby making it an excellent defensive bet.
Fortis
Fortis (TSX: FTS) operates 10 regulated electric and natural gas utility assets in Canada, the United States, and the Caribbean, serving over 3.5 million customers. Around 99% of its asset base is regulated, while 93% is involved in the low-risk transmission and distribution business. Therefore, its financials are less prone to market volatilities, thereby delivering stable and predictable cash flows. Supported by these healthy cash flows, the company has raised its dividend for 51 years and currently offers a healthy forward dividend yield of 3.6%.
Moreover, energy demand has been rising amid industrial growth, the electrification of transportation, and increasing income levels, thereby driving the demand for Fortis’s services. Amid growing demand, the company is executing a $26 billion capital investment plan, expected to expand its rate base at a 6.5% annualized rate to $53 billion by 2029. In addition to these expansions, higher customer rates and improved operating efficiencies could further strengthen its financials, supporting continued dividend growth. Meanwhile, management is hopeful of raising its dividend by 4–6% annually through 2029. Considering all these factors, I believe Fortis can help investors strengthen their portfolios in this uncertain outlook.
