Canadian equity markets have been strong this year, with the S&P/TSX Composite Index up roughly 28.5%. Improving corporate earnings, interest rate cuts, and supportive economic indicators – such as solid November job data and an upward revision to third-quarter GDP – have boosted investor confidence and driven markets higher.
However, concerns remain regarding the potential impact of global trade disruptions, stretched valuations, and a possible artificial intelligence (AI) bubble. If you’re looking to safeguard your portfolio amid these risks, here are two stable Canadian stocks that can add resilience and stability.
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Hydro One
Hydro One (TSX: H) is a pure-play electricity transmission and distribution company with no power generation assets and minimal exposure to commodity price fluctuations. Notably, 99% of its operations are covered by rate-regulated contracts, providing stable, predictable financial results. Over the past seven years, the company has grown its rate base at an annualized rate of 5.4%, supporting both financial performance and share price appreciation.
During the same period, Hydro One has returned approximately 212% to shareholders, representing an annualized rate of 17.7%. It has also consistently increased its dividend at a 5.3% compound annual growth rate since 2017 and currently offers a forward yield of 2.5%.
Looking ahead, electricity demand is expected to rise meaningfully due to the electrification of transportation, increased investment in AI-ready data centres, and economic growth. This demand expansion will broaden Hydro One’s addressable market. The utility company is actively growing its rate base through an $11.8 billion capital investment plan, projecting to increase it at a 6% annualized rate to $32.1 billion by 2027.
Supported by these growth initiatives, management expects EPS to rise 6–8% annually through 2027 and aims to grow dividends at a 6% CAGR over the same period. Along with its healthy growth prospects, Hydro One’s reasonable NTM (next 12 months) price-to-earnings multiple of 23.7 makes it an attractive choice for risk-averse investors.
Waste Connections
Another safe Canadian stock I remain bullish on is Waste Connections (TSX: WCN), a leading provider of solid waste management services across the United States and Canada. The company primarily operates in secondary and exclusive markets, which typically feature lower competition and support higher margins.
Waste Connections has expanded steadily through a combination of organic growth and strategic acquisitions. Over the past five years, it has completed more than 100 acquisitions, adding $2.2 billion in annualized revenue. Supported by the essential nature of its services and its ongoing expansion efforts, the company has delivered strong financial growth, translating into impressive long-term stock performance. Over the last decade, WCN has returned roughly 520% to shareholders — an annualized gain of about 20%. Additionally, it has increased its dividend every year since 2010 at double-digit rates and currently offers a forward yield of 0.83%.
Looking ahead, management plans to maintain its active acquisition strategy, backed by a strong balance sheet and robust cash flows. The company also focuses on leveraging technology, including robotics and optical sorters in recycling facilities, as well as AI tools to optimize commercial overage charges and maintain prices. These efforts are expected to improve efficiency and enhance profitability. Meanwhile, declining employee voluntary turnover — thanks to improved engagement and stronger safety metrics — should further support margin expansion.
Given the essential nature of its business and healthy growth outlook, WCN remains an ideal addition to a portfolio in an uncertain market environment.
