2026 might prove to be a challenging year for Canadian stock investors. The TSX Index is up over 50% in the past two years. Valuations for major TSX players are starting to look stretched. There is no shortage of economic and geopolitical risks.
Given some of the risks, it is wise to widely diversify and spread out your holdings. If I had $20,000 to invest, I would split it into five $4,000 holdings. Here is how I would structure my portfolio.
AltaGas: A solid Canadian dividend stock
I’d first look for a defensive anchor to hold through any potential market volatility. A dividend stock like AltaGas (TSX:ALA) looks well positioned today.
It has a growing American utility that provides a predictable regulated income stream. It also has multiple growth avenues through its Canadian midstream business. Asian demand for its propane exports continues to increase. Improved natural gas prices certainly help its return prospects for 2026.
It is targeting 5-7% earnings and dividend per share growth over the coming five years. It yields 3.2% today.
Dream Industrial REIT
Dream Industrial REIT (TSX:DIR.UN) is another way to earn income in a passive, low-risk way. It has a large portfolio of industrial properties across Canada and Europe. It has 95% occupancy and long-term leases.
A recent joint venture transaction demonstrates that this stock still trades at a large discount to its private market value. The stock is still relatively cheap. It earns an attractive 5.4% distribution yield right now.
Calian Group
Calian Group (TSX:CGY) is in an enviable position in 2026. It is a major supplier of healthcare, training, and satcom services to the Canadian military. Today, over 50% of its income is defence related. Given recent activist attention, it is likely to make defence operations an even larger segment of its business.
Calian stock has underperformed for a couple of years. However, that should start to change as recent Canadian government and NATO defence spending promises start to turn into contracts. This company trades at a reasonable valuation given its growth prospects.
Topicus.com
Software stocks have been demolished over the past seven months. Many believe AI could be a terminal threat. However, this could be a major value opportunity if those threats don’t materialize.
Topicus.com (TSXV:TOI) consolidates small, niche software businesses across Europe. These markets are less likely to be pursued by AI disrupters given their small total addressable market. Likewise, Topicus can use AI applications to speed up development and add more services for its customers.
This is a company that will have grown by a mid-teens rate in 2025. Yet, it trades with a 10% free cash flow yield right now. You may need to be a contrarian, but this looks like a great long-term buy.
Stantec: A strong Canadian compounder stock
Stantec (TSX:STN) has turned into a solid Canadian compounder stock. It is up nearly 200% in the past five years. It has grown into a major player in the engineering, architecture, and environmental consulting space.
Over 2025, Stantec has seen its margins improve. Its backlog has risen nearly 15%. Organic growth has stayed over 5% and acquisitions have contributed 7%.
This stock is down 8% in the past six months. While this Canadian stock is still expensive compared to peers, its growth and margin outlook likely deserve a small premium.
