I think 2026 could be the year in which defensive investors are rewarded for their focus on value. The good news for Canadian investors is that many of the country’s top stocks have some defensive component to their business models. As such, I do think the TSX could be a top international market for many global investors to consider in the year to come.
Among the top sleep-easy stocks I’ve got on my watch list for investors right now are the following. These are companies I think could have material upside in the year to come, as valuations become a top talking point in the New Year.
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Restaurant Brands
A company I like mostly for its very defensive business model (but for other attributes as well), Restaurant Brands (TSX: QSR) remains one of my top sleep-easy picks I continue to tout as a robust option heading into 2026.
This defensiveness really comes from a trade-down narrative I think could pick up in the year to come. As more diners become more cautious about their overall spend and the share of wallet that food makes up, I think the company’s core low-priced offerings could come in higher demand, particularly in Q1, which is not necessarily a historically strong quarter for the company.
With world-class fast food banners such as every Canadian’s favourite Tim Horton’s, as well as Burger King, Popeye’s, and a number of others, this is a 3.5% yielding dividend stock I think has a reasonable valuation relative to its forward growth prospects.
On that note, the stock trades at just 12 times forward earnings, which is dirt-cheap and could get significantly re-rated higher if the company’s Q1 numbers are as good as I think they’ll be.
Fortis
Another top defensive Canadian stock I continue to hammer home as one of my top picks for 2026 is Fortis (TSX: FTS).
Shares of the Canadian utility giant have been on a tear this year, surging 22% since January 1. That’s a very impressive return for a typically slow-and-steady value stock many buy for its 3.6% dividend yield.
Now, given the fact that I think interest rates are likely to come down, I do think Fortis’ current yield is remarkably attractive here. That’s partly due to the company’s rock-solid cash flow growth profile, supported by its regulated electricity and natural gas utilities business, which has boomed of late.
But it’s Fortis’ forward growth prospects that perhaps have me most excited right now. For investors looking for a sneaky way to play surging demand for utilities via the AI and technological revolutions that are underway, Fortis is among the most attractive dividend growth stocks to consider in this regard.
