In the world we’re living in today, uncertainty is the name of the game. That said, investors looking to load up on the best companies out there still have plenty of options to consider.
I think the Canadian stock market is one of the most robust and attractive places for investors to put their capital to work.
Here are three top picks I’m considering most closely right now, and why I think these stocks are still worth buying today.
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Royal Bank of Canada
A core holding for many Canadian investors, Royal Bank of Canada (TSX: RY) is among the top financial institutions in the world, with one of the best balance sheets.
The company’s scale and profitability across a range of business units makes this an absolute behemoth in terms of its size. Accordingly, it should be no surprise to some investors that RBC (and other similarly sized stocks) make up a significant amount of their portfolios (particularly if they’re passive investors).
That said, there are good reasons for this, and reasons why I think some investors may do well to consider adding additional exposure to companies like RBC. This mega bank’s profitability, its balance sheet strength, and the ability to grow earnings at a rather impressive clip (given its size) allows the company to absorb shocks and continue returning capital to investors.
Finally, for those concerned about the potential for another significant market correction on the horizon, RBC’s performance during the great financial crisis and past recessions should signal the sort of stability investors are after.
Fortis
Now, speaking of dividend growth (and underlying stability), Fortis (TSX: FTS) could be an even better pick.
The company has used its status as a leading utility provider to grow its earnings consistently and reliably for decades. This business model (which is now booming, thanks to AI and rising energy usage globally) has allowed Fortis to raise its distributions to shareholders for more than 50 consecutive years.
That kind of track record is really unheard of, and is one of the key reasons why I continue to think that Fortis’ 3.3% dividend is one worth considering.
For those who want regulated passive income streams, and upside capital appreciation exposure to one of the best compounders on the TSX, Fortis stock still looks attractive after its recent impressive run (see chart above). This is a stock with the sort of low-volatility exposure I think most investors can get behind right now, and I’m doing just that.
Canadian National Railway
Last, but certainly not least on this list of top TSX stocks I think can outperform this year, is Canadian National Railway (TSX: CNR).
Shares of the industrial giant have seen relatively muted performance in recent years. Indeed, I think there are good reasons for this.
For one, the uncertainty stemming from tariff policies in the U.S., as well as the global oil markets of late, have provided investors with key headwinds to contend with. That said, CN Rail has done a great job of managing through these issues, seeing its free cash flow surge 44% higher in Q1 compared to the same quarter the year prior.
I think the reality is that railroads are increasingly difficult to replicate, which gives CN pricing power, operating leverage, and long-term durability that many cyclical stocks lack. Even in a slower environment, the company’s rail network remains critical to North American trade, commodity flows, and consumer goods distribution.
That kind of embedded importance is exactly why CN belongs on a list of portfolio staples. For patient investors, the combination of cash flow, resilience, and strategic necessity makes CN a textbook quality compounder.
