This year has been exceptional for Canadian equity markets, with the benchmark S&P/TSX Composite Index gaining roughly 30%. However, concerns around elevated valuations, the potential AI (artificial intelligence) bubble, and ongoing geopolitical tensions persist. In this environment, retirees—who are typically more risk-averse—may benefit from adding defensive stocks to their portfolios that are less sensitive to market volatility. Against this backdrop, let’s look at my three top picks.
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Waste Connections
Waste Connections (TSX: WCN) provides collection, transfer, and disposal services for non-hazardous solid waste across secondary and exclusive markets in the United States and Canada. The company has expanded its footprint through a combination of steady organic growth and disciplined strategic acquisitions, which have supported strong, consistent financial performance. Given the essential nature of its services, WCN’s results are less exposed to market volatility, enabling it to deliver reliable earnings and healthy shareholder returns. Over the past decade, the company has generated total shareholder returns exceeding 500%, translating into an impressive annualized return of 19.7%.
Supported by a strong balance sheet and robust cash flows, management expects to continue its active acquisition strategy in the coming quarters. In parallel, the company is investing in technology—such as robotics and optical sorters in recycling facilities, as well as AI (artificial intelligence)-driven tools to optimize commercial overage charges and pricing discipline—to improve operational efficiency and enhance profitability. WCN is also benefiting from declining voluntary employee turnover, driven by stronger employee engagement and improved safety metrics.
Given its resilient business model, attractive growth prospects, and improving financial performance, WCN appears well-suited for retirees seeking stability and long-term value.
Dollarama
Another Canadian stock that I believe is well-suited for retirees is Dollarama (TSX: DOL), which operates 1,684 stores in Canada and 401 stores in Australia. Supported by its extensive footprint and compelling value-oriented offerings, the company consistently delivers healthy same-store sales, largely independent of broader economic conditions. Its direct-sourcing model and efficient logistics network enable Dollarama to offer a wide range of everyday consumer goods at attractive price points, supporting strong sales growth and solid financial performance. On the back of these strengths, the company has generated total returns of approximately 695% over the past 10 years, translating into an impressive annualized return of 23%.
Looking ahead, the Montreal-based discount retailer has ambitious expansion plans, targeting 2,200 stores in Canada and 700 stores in Australia by the end of fiscal 2034. In addition, Dollarama holds a 60.1% stake in Dollarcity, which operates 683 stores across five Latin American countries. Meanwhile, Dollarcity plans to expand its footprint to 1,050 stores by the end of fiscal 2031. Dollarama also retains an option to increase its ownership in Dollarcity to 70% by the end of 2027.
Given these growth initiatives, Dollarcity’s contribution to Dollarama’s net income could increase meaningfully in the coming years. Considering its resilient business model, strong execution, and long-term growth opportunities, Dollarama appears to be an excellent investment choice for retirees seeking stability and steady returns.
Fortis
My final pick is Fortis (TSX: FTS), which operates nine regulated utility assets across the United States, Canada, and the Caribbean, providing electricity and natural gas to approximately 3.5 million customers. With a predominantly regulated asset base and about 94% of its assets concentrated in low-risk transmission and distribution businesses, Fortis’s financial performance is less sensitive to macroeconomic conditions, enabling it to deliver stable and consistent returns. Over the past decade, the company has generated total shareholder returns of more than 171%, representing an annualized return of 10.5%. In addition, Fortis has increased its dividend for 52 consecutive years, and its forward dividend yield currently stands at 3.62%.
Fortis continues to expand its rate base through disciplined capital deployment, having invested $4.2 billion in the first three quarters, and remains on track to meet its full-year capital spending target of $5.6 billion. Looking ahead, the utility has outlined a five-year capital investment plan of $28.8 billion, which could grow its rate base at a compound annual growth rate of approximately 7% to $57.8 billion by 2030. This steady expansion should support consistent earnings growth and, in turn, underpin future dividend increases. Importantly, management expects to raise dividends by 4-6% annually through 2030, further enhancing Fortis’s appeal to retirees.
