The Best Canadian Stocks to Buy Right Away With $45,000

Here are three of the top TSX stocks to buy and hold in your self-directed investment portfolio as the market continues to fluctuate.

Key Points
  • Geopolitical turbulence has driven volatility in the TSX, so consider shifting some capital into defensive stocks to add stability to your portfolio.
  • Top TSX defensive picks: TD (TSX:TD) — Big Five bank with ~3% yield and long dividend history; Fortis (TSX:FTS) — regulated utilities with ~3.28% yield and predictable cash flows; Enbridge (TSX:ENB) — fee‑based pipelines/utilities with ~5.38% yield and growing renewables exposure.
  • Foolish takeaway: these three offer income and resilience — the author would split $45,000 evenly among TD, FTS, and ENB for stability, but still recommends broader diversification.

Ever since the US and Israel started a war with Iran earlier this year, global equity markets have fluctuated wildly with every development in the Middle East. As of this writing, the S&P/TSX Composite Index is up by over 9% from the same point a month ago.

The boost to the benchmark index for the Canadian stock market can be attributed to seemingly positive developments. However, the next pullback can come around just as quickly due to the volatile nature of the situation.

The heightened geopolitical tension, persistent inflation issues, trade disruptions, and more are likely to keep the market volatile. Right now, allocating money to defensive stocks can add much-needed stability to your self-directed investment portfolio.

It’s important to note that even defensive stocks can experience downturns in a bear market. However, these are backed by companies with resilient business models that can weather the storm and emerge stronger on the other side. To this end, here are three top picks from the financial, utilities, and energy sectors.

diversification is an important part of building a stable portfolio

Source: Getty Images

Financial sector

Toronto-Dominion Bank (TSX: TD) is one of the Big Five Canadian Bank stocks, playing a major role in the sector that is effectively the cornerstone for Canada’s economy. Regarded as some of the best dividend stocks on the TSX, bank stocks like TD stock have long been reliable investments. TD Bank stock is approaching the two-century mark of having paid investors their dividends without fail.

TD Bank has solid domestic and international banking operations, and the stock has been an excellent performer on the stock market for decades. As of this writing, it trades for $144.17 per share and pays investors $1.08 per share each quarter, translating to a 3% annualized dividend yield that you can lock into your portfolio today.

Utilities sector

Fortis Inc. (TSX: FTS) is the darling holding for Canadians with a long investment horizon. The $39.7 billion market-cap utility holdings company owns and operates several utility businesses across Canada, the US, and the Caribbean. The business can generate healthy cash flows during every market cycle due to the essential nature of its services.

To make things better, Fortis generates almost its entire revenue from long-term contracted assets, virtually guaranteeing predictable cash flows. The stability of its income lets the company invest in capital programs to expand its earnings base and grow dividends comfortably. As of this writing, Fortis stock trades for $77.93 per share and boasts a 3.3% dividend yield.

Energy sector

Enbridge Inc. (TSX: ENB) is another reliable dividend stock many investors hold for the long run. The $157.4 billion market cap stock is a giant in the Canadian energy industry. The pipeline and energy company headquartered in Calgary boasts an extensive network that is responsible for transporting a significant portion of energy products produced and consumed in North America.

Enbridge has also become one of the biggest names in the region’s utility industry after strategic acquisitions. The company also has a growing renewable energy business that sets itself up for a stronger future in a greener energy industry. Its business model shields Enbridge from commodity price volatility and generates solid cash flows to fund its dividends. As of this writing, ENB stock trades for $72.09 per share and boasts a 5.4% dividend yield that you can lock into your portfolio today.

Foolish takeaway

Boasting solid fundamentals, long-term growth prospects, and the ability to continue delivering returns through market cycles, these three TSX stocks can be excellent picks to consider right now.

If I had $45,000 to invest in the market for stability and long-term wealth growth, I would divide it evenly among TD, FTS, and ENB stock. That said, it is important to remember to diversify your holdings. While these three might be good picks to consider, I would still advise identifying more TSX stocks that fit the bill for your self-directed investment portfolio.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy.

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