After a strong rebound, Canadian equity markets have turned volatile this week as renewed inflation concerns — driven by rising energy prices and their spillover effects — have unsettled investors. Persistently high inflation could also delay the central bank’s potential interest rate cuts, adding to market uncertainty.
In this environment, investors may benefit from maintaining a balanced portfolio that includes a mix of growth, defensive, and dividend-paying stocks to help manage risk while enhancing returns. With that in mind, here are my three top picks.
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Celestica
Celestica (TSX: CLS) stands out as a compelling growth stock to consider right now, given its role in enabling hyperscalers to build and scale data centre infrastructure. Surging demand for computational power, driven by the rapid adoption of artificial intelligence (AI), is prompting hyperscalers to expand capacity, thereby boosting demand for Celestica’s products and services.
To capitalize on this opportunity, the company is focusing on innovation, strategic partnerships, and the expansion of its production capabilities. It has partnered with Google and AMD to support next-generation AI infrastructure. Additionally, Celestica plans to invest $1 billion this year to further scale and strengthen its manufacturing capabilities.
Backed by these initiatives, the company raised its 2026 outlook in January, now projecting revenue and adjusted EPS growth of 37.1% and 44.6%, respectively. Given its strong positioning in a high-growth market and solid execution, Celestica appears well-placed to sustain its upward momentum, making it an attractive investment at current levels.
Fortis
Second on my list is Fortis (TSX: FTS). With its regulated asset base and low-risk utility model, the company’s financial performance is largely insulated from commodity price swings and economic cycles. Its expanding rate base has supported steady financial growth and share price appreciation, helping deliver an average annual shareholder return of 10.8% over the past 20 years — outperforming the broader market.
Looking ahead, rising energy demand driven by economic growth, transportation electrification, and the expansion of AI-ready data centres should support continued growth. To capitalize on this, Fortis plans to invest $28.8 billion through 2030, targeting a 7% annualized rate base growth to $57.9 billion.
Supported by this visible growth pipeline, Fortis — known for increasing its dividend for 52 consecutive years — expects to grow its dividend by 4–6% annually through the end of the decade. Given its defensive business model, reliable dividend growth, and steady expansion plans, Fortis appears to be an attractive investment in the current environment.
Enbridge
Enbridge (TSX: ENB) stands out as a strong dividend stock, supported by its stable cash flows, consistent dividend growth, and attractive yield. The midstream energy giant operates an extensive pipeline network that transports oil and natural gas across North America under a tolling framework and long-term take-or-pay contracts. It also owns three natural gas utility businesses and a growing portfolio of renewable energy assets backed by long-term power purchase agreements.
Approximately 98% of Enbridge’s earnings are generated from regulated assets and long-term contracts, with around 80% tied to inflation. This structure provides highly predictable cash flows, enabling the company to increase its dividend for 31 consecutive years. Its quarterly dividend of $0.97 per share currently yields about 5.4%.
Looking ahead, Enbridge has identified roughly $50 billion in growth opportunities through the end of the decade and plans to invest $10–$11 billion annually to advance these projects. These expansion initiatives should support continued earnings growth and help sustain its track record of steady dividend increases in the years ahead.
