The Canadian equity markets staged a solid rebound last week, with the S&P/TSX Composite gaining 1.77%. Investor sentiment improved following news of a ceasefire involving the United States, Israel, and Iran, which helped lift equities. Extending this momentum, the S&P/TSX Composite Index edged up another 0.54% on Monday. However, lingering concerns remain as peace talks between the United States and Iran have broken down, alongside the announcement by the United States of a blockade of the Strait of Hormuz.
Amid this uncertain backdrop, investors may be better positioned focusing on high-quality stocks that are more resilient to broader market volatility. With that in mind, here are my three top picks.
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Hydro One
Hydro One (TSX: H) is a pure-play electricity transmission and distribution utility with minimal exposure to commodity price fluctuations. Notably, about 99% of its operations are rate-regulated, providing stability to its financial performance and generating predictable, steady cash flows. In addition, its expanding rate base—driven by self-funded organic growth—has supported earnings growth, share price appreciation, and consistent dividend payments.
Over the past five years, the company has delivered total returns exceeding 120%, reflecting an annualized growth rate of 17.4%. It has also increased its dividend consistently for the last eight years at a compound annual rate of 5.2% and currently offers a forward yield of 2.29%.
Looking ahead, Hydro One stands to benefit from rising electricity demand, fueled by the growth of AI-ready data centres and the ongoing electrification of the transportation sector. The company is also investing heavily to expand its rate base through a $11.8 billion capital program, which could increase it to $32.1 billion by the end of 2027. Given its resilient business model and solid growth outlook, Hydro One appears well-positioned to continue delivering steady returns, regardless of broader market volatility.
Dollarama
Another dependable stock to consider in any market environment is Dollarama (TSX: DOL), a leading discount retailer operating 1,691 stores in Canada and 401 in Australia. Its efficient direct-sourcing model and strong logistics network enable it to offer a wide assortment of products at compelling price points, helping drive steady customer traffic regardless of economic conditions.
The Montreal-based company continues to expand its footprint and aims to grow its store network to 2,200 locations in Canada and 700 in Australia by the end of fiscal 2034. Backed by an efficient capital model, rapid sales ramp-up, and relatively low maintenance capital requirements, this expansion could support both revenue and earnings growth.
Additionally, increasing contributions from its investments in Central American Retail Sourcing (CARS) and Inversiones Comerciales Mexicanas (ICM) could further strengthen its financial performance in the coming quarters. Overall, Dollarama’s growth outlook remains robust, making it a resilient choice regardless of broader market volatility.
Waste Connections
My final all-weather pick is Waste Connections (TSX: WCN), a leading provider of non-hazardous solid waste collection, transportation, and disposal services. The company primarily operates in secondary and exclusive markets across the United States and Canada, where it faces limited competition and benefits from higher operating margins. Its disciplined approach to both organic growth and strategic acquisitions has supported strong financial performance and share price appreciation. Over the past five years, WCN has acquired more than 100 assets, adding approximately $2.3 billion in annual revenue.
Supported by robust cash flows and a strong balance sheet, management intends to continue pursuing an active acquisition strategy. The company also has a sizable pipeline of private acquisition targets representing around $5 billion in annual revenue. In addition, WCN is expanding its renewable energy footprint, having recently commissioned five renewable natural gas (RNG) facilities, with more projects expected to come online by year-end.
Given the essential nature of its services and its solid long-term growth outlook, WCN appears well-positioned to deliver consistent returns, making it an attractive investment despite ongoing market uncertainty.
