Canadian stocks have been resilient this year. The TSX Index is up 37% over the past year.
Canada is increasingly seen as a safe haven for investors. Frankly, Canada has a lot to offer investors. There are tons of defensive stocks that pay regular dividends and provide steady growth.
When the market is precarious, you can turn to these stocks for predictability and stability. Here are two Canadian stocks I’m happy owning for steady capital gains and dividend income returns.
Source: Getty Images
A top Canadian stock for defence and offence
AltaGas (TSX: ALA) is a stock for defence and growth. You get defence from its gas utilities in the northern U.S. This regulated business makes up around 55% of its business.
The utility segment has attractive opportunities to grow its rate base by the high single digits. It also has rising opportunities to provide gas infrastructure for expanding data centres in the northeast.
The midstream segment is where some of the more exciting growth is coming from. Given the Middle East shipping constraints, Asian demand for Canadian LPG (liquified petroleum gas) is swiftly rising. AltaGas already has two export terminals. However, it has substantive expansion projects in the works.
In its recent third quarter, adjusted earnings before interest, tax, depreciation, and amortization (EBIDTA) rose 19%, and normalized earnings per share (EPS) rose 16%. AltaGas is getting the benefit of higher volume demand and rapidly improving pricing.
It now expects to hit the high end of its guidance range for 2026. However, if the current dynamic lasts longer than expected, AltaGas could exceed that guidance.
AltaGas pays a 2.6% dividend yield. This Canadian stock has been raising that dividend regularly over the past five years. It continues to expect 5-7% annual dividend growth ahead. With a balance sheet below its debt target, it has ample flexibility to both invest in growth and continue tangibly rewarding shareholders.
A top Canadian real estate company
Granite Real Estate Investment Trust (TSX: GRT.UN) is another stable stock to look at. It owns 141 industrial, logistic, manufacturing, and warehousing properties across Canada, the U.S., Europe, and recently the U.K.
These are large scale, institutional quality complexes that cater to modern commerce. Right now, it has 98.6% occupancy with an average lease term over five years. Many of its leases have annual rent escalators, so it naturally enjoys organic growth.
The REIT has an exceptional balance sheet (one of the best amongst peers). This affords Granite considerable flexibility in both good times and bad. Even after Granite pays its growing dividend, it generates around $100 million of extra cash per year.
It can either be opportunistic to acquire new properties, or it can return that to shareholders. Granite has been known to be aggressive on share buybacks when the stock trades below its private market value. It’s a nice backstop for when the stock is volatile.
Granite stock yields 3.8%. It has a 15-year track record of annually raising its dividend. Its stock is up 16% this year, but it is still relatively cheap compared to its private market value. This is a great Canadian dividend stock to hold through volatile times.
