3 Canadian Stocks That Could Shine in a Higher-for-Longer Rate World

If rates stay higher for longer, these three TSX stocks aim to win with hard assets, steady demand, and businesses that don’t rely on cheap money.

| More on:
Key Points
  • IAMGOLD is scaling up production and cash flow, giving investors a stronger gold hedge if uncertainty persists.
  • BMO can keep earning through higher rates as long as credit stays healthy and the economy avoids a hard landing.
  • GFL provides essential waste services with pricing power, but the stock’s valuation assumes continued smooth execution.

If rates stay higher for longer, the stocks that tend to hold up best are usually the ones with pricing power, steady demand, and enough financial strength to keep growing without cheap money. That can mean gold miners that benefit from safe-haven demand, banks that can still earn well on lending and deposits, and essential service companies that keep collecting revenue no matter what the economy throws around. So let’s look at three on the TSX today.

Woman checking her computer and holding coffee cup

Source: Getty Images

IMG

IAMGOLD (TSX: IMG) is no longer just a mid-tier miner hoping for better days. It now has a large Canadian mine ramping up, alongside Essakane and Westwood, and that gives it a much stronger production base. Over the last year, the company reported 2025 attributable production of 765,900 ounces and said Côte reached nameplate throughput by year-end, while management shifted its 2026 focus toward stabilization, optimization, and preparing for a possible expansion.

IAMGOLD reported 2025 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.5 billion, with operating cash flow above $1 billion, helped by high gold prices and a much stronger fourth quarter. It currently holds a market cap of about $13 billion and a trailing price-to-earnings ratio near 14.5, which is not cheap like an old-school deep value play, but it still looks reasonable for a miner coming into a new phase of scale. If rates stay high and investors keep leaning toward gold as a hedge, IAMGOLD could keep looking like a timely buy. The obvious risk is that mining costs or gold prices turn the wrong way, but the setup looks much sturdier than it used to.

BMO

Bank of Montreal (TSX: BMO) is the classic higher-for-longer candidate because banks do not need falling rates to make money. They need discipline, healthy credit, and a good mix of lending and fee income. BMO stock still offers that, with major exposure across Canadian personal and commercial banking, U.S. banking, wealth, and capital markets. Over the last year, it kept reshaping its business, including the planned sale of 138 U.S. branches and a push into stronger Western U.S. markets, while also moving ahead with the Burgundy Asset Management acquisition and even launching a tokenized cash platform with CME and Google Cloud.

In the first quarter of 2026, BMO stock reported net income of $2.5 billion and adjusted earnings per share (EPS) of $3.48, both up from a year earlier. It offers a market cap of roughly $144.5 billion at writing and a trailing price-to-earnings (P/E) near 17. Again, not bargain-basement cheap, but fair for a bank with scale, improving earnings, and room to benefit if rates remain high but the economy stays intact. If the economy cracks, credit costs become the problem. But if growth just stays choppy, BMO stock looks like the kind that can keep grinding forward.

GFL

GFL Environmental (TSX: GFL) shows that waste collection, disposal, recycling, and environmental services don’t disappear when rates stay elevated. Businesses and municipalities still need those services, and that gives GFL a more durable demand backdrop than many cyclical companies. Over the last year, it kept reshaping itself in a big way, including the recapitalization of Green Infrastructure Partners and the announced $6.4 billion acquisition of Secure Waste, which would deepen its Western Canada footprint.

GFL reported full-year 2025 revenue of $8.1 billion and adjusted EBITDA of about $2.3 billion, and issued 2026 guidance that it later raised after first-quarter results. In the first quarter of 2026, revenue reached $1.6 billion, and management lifted its full-year outlook. It holds a market cap around $18 billion, with a trailing P/E above 100 and a forward P/E near 42, so this is not a cheap stock by traditional measures. Still, investors often pay up for steady service businesses with room to grow through acquisitions and pricing.

Bottom line

Put the three together, and the mix works. IAMGOLD gives investors exposure to gold and operating momentum. BMO stock adds earnings power and stability from a large financial platform. GFL brings defensive revenue with growth still in the tank. Plus, none of these need a perfect macro backdrop to work. That’s exactly why they stand out if rates stay stubbornly high for longer than investors would like.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Alphabet. The Motley Fool has a disclosure policy.

More on Dividend Stocks

House models and one with REIT real estate investment trust.
Dividend Stocks

Your GIC Is Maturing: Here’s Where I’d Put $10,000 for More Income

When GIC rates fall, a grocery-anchored REIT like Crombie can offer higher monthly income with some growth potential.

Read more »

top TSX stocks to buy
Dividend Stocks

1 Canadian Dividend-Growth Stock Built to Deliver in Any Market Condition

Alimentation Couche-Tard (TSX:ATD) stock looks like a dividend-growth play that can do well in most climates.

Read more »

investor looks at volatility chart
Dividend Stocks

A Top TSX Dividend Stock to Buy on Pullbacks

This high-yield stock offers good prospects for dividend growth.

Read more »

A solar cell panel generates power in a country mountain landscape.
Dividend Stocks

1 Canadian Dividend Stock Down 19% to Buy and Hold Forever

This Canadian dividend stock is down about 19% from its 52-week high, but its record FFO, a 5.1% dividend yield,…

Read more »

A woman stands on an apartment balcony in a city
Dividend Stocks

Why I’m Bullish on This TFSA Dividend Stock Yielding 2.7% Monthly

Boardwalk REIT’s monthly distributions, resilient operating growth, and discounted valuation could make it an attractive TFSA stock to buy now.

Read more »

you're never too young or old to start investing in stocks
Dividend Stocks

3 Best Dividend Stocks in Canada for Beginner Investors

A look at three of the best dividend stocks in Canada for beginner investors, including their yields and why they…

Read more »

Concept of rent, search, purchase real estate, REIT
Dividend Stocks

Why I’m Watching This 4.6% Dividend Stock That Pays Monthly Cash

Sienna Senior Living offers investors a 4.6% dividend yield with monthly payouts, while its recent share price pullback makes the…

Read more »

Canadian investor contemplating U.S. stocks with multiple doors to choose from.
Dividend Stocks

Enbridge vs. Telus: Which Is the Better Dividend Stock to Own Through 2026?

Enbridge and Telus both offer attractive yields, but their financials and underlying fundamentals reveal a big difference in dividend stability…

Read more »