Heightened geopolitical tension, persistent inflation concerns, trade disruptions, and broader macroeconomic uncertainty are likely to keep the equity market volatile. Thus, allocating capital to defensive stocks, Canadian companies whose businesses tend to remain stable even when the economic environment deteriorates, will add stability to your portfolio.
Notably, defensive stocks are backed by companies that witness resilient demand for their products and services through economic cycles. Two sectors that consistently stand out in this category are consumer staples and utilities. Consumer staples companies offer everyday necessities such as food, groceries, and household products. Utilities, meanwhile, provide critical services like electricity and energy distribution. Consumers continue to rely on these services regardless of economic conditions, allowing companies in these industries to maintain stable cash flows even when discretionary spending slows.
Against this backdrop, here are the top defensive stocks to buy now for stability. These companies have solid fundamentals and resilient business models.
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Canadian defensive stock #1: Loblaw
Loblaw (TSX: L) is a top Canadian stock to buy right now for stability and growth. Canada’s largest grocery and pharmacy retailer benefits from steady demand for essential goods, including food and healthcare products. Because these items remain necessary regardless of economic conditions, Loblaw enjoys a reliable revenue base that supports consistent earnings.
This defensive strength has translated into impressive capital appreciation for investors. Over the past five years, Loblaw stock has surged by more than 279%, far outperforming the broader equity market. Supporting Loblaw’s growth has been its strong same-store sales and value pricing strategy, which appeals to a wide range of customers. Loblaw has also strengthened customer loyalty through its rewards ecosystem and digital tools, which encourage repeat purchases and larger shopping baskets by connecting online platforms with its extensive store network.
At the same time, the company continues to invest heavily in operations to sustain future growth. Loblaw is expanding its retail footprint with new stores while modernizing its supply chain through automation in distribution centers. These upgrades aim to improve logistics costs and enhance inventory management, ultimately supporting stronger margins.
Looking ahead, the growing penetration of private-label products, the expansion of discount store formats, and higher-margin services such as healthcare and retail media are strengthening Loblaw’s growth prospects. Overall, the retailer remains well-positioned to deliver steady growth and stability.
Canadian defensive stock #2: Fortis
Fortis (TSX: FTS) is another top Canadian stock to add stability to your portfolio. It focused on transmission and distribution of electricity and benefits from a large regulated asset base, which provides predictable earnings.
Thanks to its growing regulated asset base, Fortis has consistently increased its dividend for 52 years in a row. Moreover, this growth trajectory will likely continue in the years ahead.
Looking ahead, Fortis plans to deploy approximately $28.8 billion in capital over the next five years. The spending will be focused on regulated utility infrastructure, including transmission and distribution networks. The move will strengthen its low-risk earnings base.
These investments are expected to increase Fortis’s rate base to $58 billion by 2030, adding stability to its operations and supporting higher earnings and dividend payments. Management currently expects to grow its future dividend by 4% to 6%.
Further, Fortis is likely to benefit from structural growth in electricity demand. Expanding industrial activity, the electrification of transportation, and the rapid growth of energy-intensive infrastructure such as data centers are expected to drive higher power consumption, supporting Fortis’s growth. At the same time, Fortis’s strong balance sheet and the sale of non-core assets augur well for growth.
Overall, Fortis is a reliable defensive stock for stability, income, and growth.
