Market Pullback? These Defensive TSX Names Could Cushion the Drop

Market pullbacks are opportunities, so here are three defensive TSX dividend stocks (BCE, Metro, Fortis) to buy, hold, and collect income.

Amy Legate-Wolfe

Author Bio 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. Social Media 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 October 7, 2025 4:40 pm EDT

| More on: BCEFTSMRU

Key Points

BCE provides steady income and low volatility through subscription telecom services and a strong dividend during downturns.
Metro's grocery and pharmacy sales are recurring, low-volatility, and support reliable cash flow plus growth from automation investments.
Fortis is a regulated utility with predictable rate-base earnings, decades of dividend increases, and mid-single-digit dividend growth guidance.

It can be super stressful during a market pullback. Investors tend towards hoarding their cash and not using the pullback for what it really is: an opportunity. Imagine all the names you’ve been dying to invest in for years, and suddenly they’ve gone on sale! And when it comes to defensive stocks, this can mean there’s a pullback that isn’t going to last for long.

That’s why today we’re going to look at three defensive dividend stocks that provide perfection for any portfolio. All you need to do is buy and hold, collecting dividends and ideally using dollar cost averaging. This will reduce volatility and risks, and allow investors to hold these stocks for years without fearing the worst. So let’s look at the top choices I’d pick on the TSX today.

a person prepares to fight by taping their knuckles — Source: Getty Images

BCE

First up, we have BCE (TSX:BCE), Canada’s largest telecom and media company. The dividend stock offers wireless, fibre internet, television, and business services, as well as media and advertising. What’s more, second-quarter earnings were strong for the dividend stock. BCE reported consolidated revenue up 1.3% year over year, with net earnings up 6.6% to $644 million.

Now there were some risks, as earnings per share (EPS) dropped 19%, yet there were meaningful mobile activations and fibre net additions. This improved postpaid churn, and with management integrating the Ziply Fiber acquisition, the company could be headed towards a rebound.

Meanwhile, there are a few reasons BCE stock works among defensive dividend stocks. Telecom provides a service that people buy regardless of the economy. It also provides subscription and contract revenue, and a low beta of just 0.64. Furthermore, BCE offers a strong dividend yield, so income will certainly smooth out any short-term volatility.

MRU

Next up, we have Metro (TSX:MRU), one of the largest Canadian food retailers and pharmacy operators in Canada. And yet again, we have a defensive dividend stock demonstrating its worth during the third quarter of 2025. Metro reported sales up 3.3%, with same-store sales up 2%. Pharmacy also rose in sales by 5.5%, all while the company continues to invest in store openings.

And remember, this too is a defensive stock. The grocery provides services as well that we need no matter what, namely food. Grocery means recurring sales, and this creates solid cash flow even during downturns. Metro stock is also a very low beta of just 0.24, so less likely to drop in share price even during a market pullback.

Yet the future still looks strong for Metro stock. The dividend stock continues to invest in distribution automation, and this supports reliable long-term earnings. Furthermore, MRU is an efficient and defensive play against cost pressures. Overall, it’s simply a safe haven within consumer spending.

FTS

Finally, we have Fortis (TSX:FTS), a diversified, largely regulated electric and gas utility group operating across North America and even in the Caribbean. This has created steady rate-base growth for Fortis stock, demonstrated during the first half of 2025.

The utility stock reported higher net earnings in the second quarter, executing a large $5.2 billion annual capital plan, with $2.9 billion invested in the first half already. Furthermore, the dividend stock stated it’s advancing a large grid and storage project, with guidance for mid-single-digit dividend growth between 4% to 6% through 2029.

Fortis literally keeps the lights on, made even more predictable thanks to a regulated rate base for long-term income. So no wonder it holds a low 0.35 beta and pays meaningful dividends – dividends that have risen every year for over 50 years! And that doesn’t look as though it’s going anywhere, especially with the expansion into data centres.

Bottom line

When it comes to defensive dividend stocks, look to companies that are needed no matter what’s going on in the world. In this case, BCE, MRU, and FTS are prime targets. Each provides essential services, predictable cash flow, low market sensitivity, and income. These are features that can cushion any portfolio against broad market drops.