While no equity investment is safe, the TSX offers several stocks that tend to hold up better during periods of market volatility. These companies are often found in defensive sectors such as utilities and consumer staples, where demand for products and services remains relatively stable regardless of broader economic conditions.
Many of these low-volatility Canadian stocks are also market leaders with strong fundamentals. They generate reliable cash flows, maintain healthy balance sheets, and follow disciplined capital allocation strategies. These stocks add stability to your portfolio even when market sentiment turns cautious.
Against this background, here are two Canadian stocks that are relatively safe bets to buy now and hold during market volatility.
Dollarama stock
Dollarama (TSX:DOL) stock is a defensive play offering stability, income, and growth. The discount retailer has rewarded shareholders with consistent returns, supported by a business model that continues to perform well across economic cycles. The stock has risen over 48% in a year. Moreover, it has gained nearly 288% over the past five years, delivering above-average returns.
Dollarama’s financials and share price are driven by its value-focused strategy. The company sells everyday essentials, seasonal items, and general merchandise at low, fixed price points. This pricing strategy resonates with consumers regardless of economic conditions, driving steady demand and resilient earnings.
Looking ahead, Dollarama appears well-positioned to sustain above-average growth. The retailer is expanding its store network in Canada while also pushing into international markets. Its new stores have low maintenance costs with quick payback periods, making expansion efficient.
Dollarama is also adapting to changing shopping habits by increasing its presence on third-party delivery platforms, adding convenience and creating opportunities for incremental sales. Its balanced mix of national brands and private-label products helps attract a broad customer base while preserving healthy margins. Moreover, its focus on direct sourcing cushions its bottom line.
The recent acquisition of Australia’s The Reject Shop adds geographic diversification and expands Dollarama’s global footprint.
Looking foward, Dollarama is well-positioned to deliver steady growth and above-average capital gains. Moreover, the value retailer has consistently increased its dividend since 2011 and is likely to maintain the dividend growth streak. Overall, Dollarama is a dependable stock to buy and hold in all market conditions.
Fortis stock
Investors seeking stocks that can add stability to their portfolios amid market volatility could consider Canadian utility stocks. These firms provide essential services such as electricity and natural gas, which households and businesses rely on regardless of economic conditions. Because these services are regulated, cash flows tend to be predictable, supporting steady earnings growth and dependable dividend payments.
Within this sector, Fortis (TSX:FTS) is a compelling investment option. The company’s defensive business model is anchored in rate-regulated assets, which provide visibility into future revenues and cash flows. This structure has allowed Fortis to maintain its dividend through various market cycles and increase it consistently. Notably, the company has raised its dividend for 52 consecutive years.
Fortis focuses primarily on electricity and gas transmission and distribution rather than power generation. This limits exposure to commodity price fluctuations and the operational risks associated with power generation. As a result, its earnings tend to be more stable.
The company’s growth outlook further strengthens its investment case. Fortis plans to invest $28.8 billion to expand its regulated asset base. These investments are expected to drive the rate base and support management’s expectation of increasing the dividend by 4% to 6% annually. In addition, rising electricity demand from industries such as manufacturing and data centres could provide incremental growth over time.
Overall, Fortis stock offers stability, consistent dividend growth, and modest growth.
