2 TSX Stocks That Could Outperform in a Slower-Growth Market

Slow-growth markets can still reward patient investors, especially with income stocks backed by real assets like warehouses and iron ore.

Amy Legate-Wolfe

Author Bio

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband.

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Favorite Investment Quote

“October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published May 11, 4:20 pm EDT

| More on: LIFNXR.UN

Key Points

Nexus Industrial REIT is now a pure-play industrial landlord, aiming for steady demand from logistics and warehousing tenants.
Its high monthly distribution looks attractive, but payout coverage and refinancing costs need close watching.
Labrador Iron Ore Royalty offers a simple royalty model tied to IOC’s iron ore cash flow, with dividends that can swing.

Slow-growth markets can feel like driving through fog. You don’t need the fastest car, but the one with good brakes, a full tank, and a driver who knows the road. For investors, that often means companies with steady demand, reliable income, hard assets, and a valuation that leaves room for patience. Industrial real estate and royalty-style commodity exposure can both fit that idea. So let’s look at two on the TSX today.

Forklift in a warehouse — Source: Getty Images

NXR

Nexus Industrial REIT (TSX:NXR.UN) owns and operates industrial real estate across Canada, including logistics, warehousing, and light industrial properties. That’s a useful corner of the market in a slower economy. Businesses still need storage, distribution, and operating space, even if consumers spend more carefully. Nexus spent the last year cleaning up its story. It completed its transition into a pure-play industrial real estate investment trust (REIT), which makes the business easier for investors to understand.

In 2025, Nexus stock completed development properties, kept leasing active, and ended the year with 87 properties and about 12.9 million square feet of gross leasable area. It also announced a $500 million unsecured debenture program in 2026, giving it more financing flexibility. For 2025, Nexus delivered record net operating income (NOI) of $129 million, up 2.8% from the year before. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $120 million, while funds from operations (FFO) came in at $0.61 per unit. All in all, solid numbers for a REIT still working through higher financing costs.

Valuation also gives Nexus stock some appeal. The stock recently traded with a market cap near $774 million and a forward price-to-earnings ratio around 11. It also pays a monthly distribution of about $0.64 annually, giving it a yield near 8%. That income looks tempting, though investors should watch payout coverage carefully. The risk is clear; if rates stay high or tenants weaken, cash flow could face pressure. Still, industrial demand, monthly income, and a cleaner structure make Nexus stock a reasonable slow-growth pick.

LIF

Labrador Iron Ore Royalty (TSX:LIF) offers a very different kind of exposure. It doesn’t run a mine directly, but owns a royalty interest and equity stake tied to Iron Ore Company of Canada (IOC), which produces high-grade iron ore concentrate and pellets in Labrador City. That makes LIF a lean, cash-flow-focused business. It benefits when IOC performs well, iron ore prices hold up, and dividends flow from the underlying operation.

In the first quarter of 2026, LIF dealt with weaker IOC profitability and operational issues tied to haul truck availability and pellet plant reliability. Sales volumes also came under pressure. Still, the 65% iron index averaged US$121 per tonne in the quarter, up 3% from the same period in 2025. That helped cushion the impact. Royalty revenue came in at $35.4 million, almost flat from $35.6 million a year earlier, and net income per share fell 36% to $0.21, while adjusted cash flow per share held steady at $0.31. The company also declared a $0.30 quarterly dividend for the first quarter for a 4.8% yield while trading at about 18 times earnings at writing.

Looking ahead, LIF could outperform if investors continue to value income, clean balance sheets, and exposure to critical industrial materials. High-grade iron ore still plays a role in steelmaking, infrastructure, and lower-emission production routes. The risk is commodity volatility. Dividends can move around, and IOC’s operational hiccups can hit results quickly. Yet LIF has no operating mine to fund directly, which keeps the model refreshingly simple.

Bottom line

Nexus stock offers monthly income and industrial real estate exposure, while LIF offers royalty-backed cash flow and high-grade iron ore leverage. Neither stock needs a roaring economy to make sense. Both carry risks, but they also bring income, real assets, and reasonable valuations to the table. And even $7,000 can bring in immense income on a regular basis.