Canadian equity markets have maintained strong upward momentum, with the S&P/TSX Composite Index reaching a new all-time high yesterday and gaining more than 34% over the past 12 months. Despite this impressive performance, concerns remain around elevated valuations, ongoing geopolitical tensions, and the potential impact of protectionist policies on global economic growth.
Against this backdrop, I believe investors should adopt a balanced approach by combining growth, defensive, and dividend-paying stocks to optimize returns while managing risk. With that in mind, here are my three top picks.
Source: Getty Images
Celestica
Celestica (TSX: CLS), a leading electronics manufacturing services company, has delivered returns of approximately 195% over the past 12 months, beating the broader equity markets. The stock’s strong performance has been supported by consistently impressive quarterly results and management’s improved forward guidance.
The rapid adoption of integrative artificial intelligence (AI) tools by businesses and individuals is driving a sharp increase in demand for computing power. To meet this growing need, hyperscalers are ramping up investments to expand and upgrade their infrastructure, driving higher demand for Celestica’s products and services. At the same time, the company continues to invest in innovation, including the development of advanced switches and storage solutions, further strengthening its competitive positioning.
Supported by these favourable industry trends, Celestica’s management expects revenue and adjusted earnings per share (EPS) to grow by 26.4% and 52%, respectively, in 2025, followed by 31.1% growth in revenue and 39% growth in adjusted EPS in 2026. Despite its strong run, the stock trades at a reasonable next-12-month price-to-sales multiple of around 2.4, making Celestica an attractive buying opportunity for growth-oriented investors.
Waste Connections
My second pick is Waste Connections (TSX: WCN), a non-hazardous solid waste management company. It operates primarily in secondary and exclusive markets across the United States and Canada, where it faces less competition and benefits from structurally higher margins.
Waste Connections has successfully pursued a balanced strategy of organic growth and disciplined acquisitions to expand its footprint and enhance financial performance, thereby supporting strong long-term share price appreciation. Over the past 10 years, the company has delivered total returns of more than 440%, translating into an impressive annualized return of approximately 18.4%.
Looking ahead, management expects to maintain an active acquisition strategy, supported by a strong balance sheet and robust free cash flow generation. The company also has a healthy pipeline of private acquisition targets across the United States and Canada that could collectively generate $5 billion in annualized revenue over time. In parallel, WCN continues to leverage advanced technologies to improve operational efficiency and profitability.
Additionally, reducing employee voluntary turnover amid improved employee engagement and strengthening safety metrics are supporting margin expansion. Given its resilient business model, steady growth profile, and defensive characteristics, WCN would be well-positioned to stabilize your portfolio.
Enbridge
My final pick is Enbridge (TSX: ENB), a high-quality dividend stock that has increased its dividend for 31 consecutive years and currently offers an attractive yield of approximately 5.96%. As a diversified energy infrastructure company, Enbridge operates more than 200 revenue-generating assets and has minimal exposure to commodity price fluctuations.
About 98% of Enbridge’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is generated from regulated assets or long-term, contracted arrangements, while roughly 80% of adjusted EBITDA is inflation-indexed. This highly stable business model reduces sensitivity to economic cycles and market volatility, enabling the company to generate predictable, reliable cash flows that have supported consistent dividend growth over the decades.
Looking ahead, Enbridge is expanding its asset base through a $37 billion secured capital investment program, with projects expected to enter service over the next four years. These investments could drive earnings and cash flow growth, positioning the company to return approximately $40–$45 billion to shareholders over the next five years. Taken together, Enbridge’s durable cash flows, visible growth pipeline, and strong shareholder returns make it an excellent buy for income-focused investors.
