The Toronto Stock Exchange notched a new record high to start March 2026, despite a revived military conflict in the Middle East over the weekend. However, the breakout performance was short-lived. The sharp, war-driven market sell-off that followed on Tuesday, March 3, saw the TSX plunge 756 points or 2.2%.
During this heightened volatility, including potential oil supply disruptions, investors need to prioritize diversification and focus on companies with strong balance sheets and free cash flow. If I’m investing now, I’m still buying Canadian Natural Resources (TSX:CNQ), Fortis (TSX:FTS), and Rogers Sugar (TSX:RSI).
The stock selection is cautious and opportunistic. Moreover, these Canadian companies provide essential things-energy, electricity, and food- which should help keep the stock prices steady.
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Cash flow machine
Canadian oil and gas companies are in the spotlight due to unfolding events in the Middle East. As of this writing, energy is the TSX’s top-performing sector year to date (+24.88%). Canadian Natural Resources is a viable choice to counter oil price pressures and hedge against inflation.
The $92 billion senior crude oil and natural gas producer operates within North America and is the least vulnerable to supply disruptions in the Persian Gulf. In addition to 25 consecutive years of dividend increases, this energy major boasts low break-even costs, notably US$40 per barrel of West Texas Intermediate (WTI). Any increase in oil prices boosts profit margins.
WTI crude oil price hovers around US$75 to US$77 per barrel. At $60.24 per share, current investors enjoy a 29.6% year-to-date gain and partake in the 3.87% dividend. The bull case for CNQ is its solid balance sheet, stable production, and low operating costs. You’d have a cash flow machine in the current situation.
Safety shield
Fortis is the ultimate safety shield in a volatile market. The dividend knight status is a compelling reason to invest in this dividend stock. Its 52-year dividend-growth streak endears risk-averse income investors. Furthermore, the regulated business model makes FTS a rock-solid investment, notwithstanding macroeconomic pressures.
This $39.8 billion electric and gas utility company serves customers in Canada, the U.S., and the Caribbean. At $78.73 per share (+11.25% year-to-date), the dividend yield is 3.23%.
According to management, the new $28.8 billion five-year capital plan (2026-2030) is highly executable and supports the 4%-6% annual dividend growth guidance through 2030.
Constant income
Sugar is a low-growth but predictable business. Rogers Sugar refines and sells sugar and maple syrup in Canada. This consumer staple stock is a high-yield income play and should endure a stormy market. The price hardly moved during the market sell-off. RSI trades at $6.65 per share (+11.8% year to date) and pays a 5.46% dividend.
In fiscal 2025, the $845 million company reported a nearly 20% increase in net earnings to $64.4 million, up from fiscal 2024. Mike Walton, President and CEO of Rogers and Lantic, said the strong profitability growth reflects the resilience and adaptability of our business in a challenging market environment.
Financial win
The recent market sell-off could be one of many in March as the Middle East war intensifies. Choosing businesses that provide essential services such as energy, electricity, and food can calm investors’ fears and help secure a financial win amid massive headwinds.
