Building a well-diversified portfolio means balancing stability with long-term upside. It also means balancing income-producing stocks that can compound over time with others that can provide growth. That balance between growth and safety can provide lucrative returns over time.
Fortunately, there’s no shortage of great investments on the market that can meet both of those needs. Here’s a look at four of those options that can provide the growth and safety for any portfolio.
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Generate income and defensive cash flow
The first stock for investors to consider is Enbridge (TSX:ENB). Enbridge is one of the most reliable income‑producing stocks in Canada and appeals to investors seeking both growth and safety.
The company derives the bulk of its revenue from its massive pipeline business. That segment is incredibly defensive, generating stable cash flow that resembles a toll road network. Enbridge also operates a renewable energy business and a natural gas utility.
Collectively, those segments generate predictable cash flows backed by long‑term contracts. That stability supports Enbridge’s long history of paying and growing its dividend, making it a dependable anchor during market turbulence.
As of the time of writing, Enbridge offers a quarterly dividend that pays a yield of 5.4%. The company has also provided annual upticks to that dividend going back three decades without fail.
For investors seeking growth and safety, Enbridge stock remains a solid option to own.
Generate recession‑resistant growth
Another option for investors looking for growth and safety that can withstand market volatility is Dollarama (TSX:DOL). Dollarama has become one of Canada’s strongest growth stories over the past decade.
That growth story is now international. Prospective investors should note that Dollarama also operates a growing presence in both Latin America and Australia. This gives Dollarama a unique blend of growth and defensive appeal.
Dollarama is driven by consistent same‑store sales and a steady pace of new store openings. The appeal of a dollar store is that it benefits during economic slowdowns as consumers trade down to value retailers.
Its high‑margin business model and efficient operations support strong earnings growth year after year. For investors seeking growth and safety from a defensive retail stock for any market cycle, Dollarama stock is hard to ignore.
Financial strength + dividend durability
It would be hard to mention growth and safety stocks without acknowledging at least one of Canada’s big bank stocks. Bank of Montreal (TSX:BMO) is the oldest of the big banks and a great option for investors to consider.
BMO stock provides a balanced mix of stability, income, and long‑term growth. The bank’s diversified earnings base, strong capital position, and long dividend history make it a dependable choice for investors seeking both safety and steady returns.
In fact, BMO has paid out dividends for nearly two centuries without fail. That fact alone makes this a solid option for investors looking for dividend stocks that continue to pay, even during times of volatility.
As of the time of writing, BMO offers a yield of 3.4%. The bank has also provided investors with annual upticks to that dividend going back over a decade.
Steady global compounding
One final pick for investors seeking growth and safety in their portfolios is Alimentation Couche‑Tard (TSX:ATD). Couche-Tard built a global convenience retail empire through disciplined acquisitions and consistent organic growth.
That focus on growth has made Couche-Tard one of the largest convenience store and gas station operators on the planet. Fuel, convenience stores, and essential goods offer an unlikely yet lucrative mix that performs well regardless of economic conditions.
Couche-Tard generates strong free cash flow, which is reinvested into further expansion and shareholder value creation. In fact, over the past five years Couche-Tard’s stock price has surged by over 110%.
The company’s history of steady earnings growth and low volatility makes it one of the most reliable long‑term compounders on the market.
Building a balanced portfolio for growth and safety
No stock is without some risk. That’s why the need to diversify is so important. The four stocks mentioned above balance the need for growth and income while also offering defensive appeal.
Together, these four stocks create a diversified mix of growth and safety, making them ideal for any well-diversified portfolio.
