Markets can get gloomy fast, and a technical recession can make calm investors feel twitchy. Canada recently slipped into one after gross domestic product (GDP) fell at a 0.1% annualized pace in the first quarter of 2026, following a revised 1% drop in the fourth quarter of 2025. That doesn’t mean every company suddenly weakens, but it does mean investors may want stocks with real cash flow, essential demand, and balance-sheet strength to ride through weakness.
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SLF
Sun Life Financial (TSX:SLF) looks like a first place to start. The company offers life insurance, wealth management, group benefits, and asset management across Canada, the U.S., Asia, and other markets. People still need insurance, employers still need benefits, retirees and savers still need financial products, making it a stable investment even during a recession.
The latest quarter wasn’t perfect, but it showed the strength of the franchise. Sun Life reported underlying net income of $1.1 billion in the first quarter of 2026, roughly flat from last year. Underlying earnings per share (EPS) rose 4% to $1.89. Assets under management climbed to $1.6 trillion, while the LICAT ratio came in at a strong 143%.
That gives Sun Life a solid defensive profile. Its dividend also helps. The company raised its common share dividend to $0.96 per quarter, giving investors a yield near 3.7%. The risk is that reported net income dropped sharply, and asset-management results can feel pressure when markets weaken. Still, Sun Life’s scale, capital position, and global reach make it worth holding when the mood turns cautious.
CP
Canadian Pacific Kansas City (TSX:CP) brings a different kind of resilience. It doesn’t offer a huge dividend, or look cheap on a simple yield screen. But railways can hold up better than many cyclical businesses because they move goods the economy still needs. Grain, energy, potash, automotive products, and consumer goods still have to travel, even when growth cools.
CP stock also has a unique network after the Canadian Pacific and Kansas City Southern combination. It now links Canada, the U.S., and Mexico through one rail network. That can help as North American supply chains shift and companies look for efficient ways to move freight across borders.
In the first quarter of 2026, CP stock reported revenue of $3.7 billion, diluted earnings per share (EPS) of $0.94, and core adjusted diluted EPS of $1.04. Those results missed some market expectations, but still showed a profitable, essential infrastructure business. The risk is obvious. A recession can hit freight volumes, and tariff uncertainty can also create headaches. Yet CP stock has the network, pricing power, and long runway to remain attractive for patient investors.
T
TELUS (TSX:T) offers the highest income of the three, though it also carries the most obvious debt and payout questions. The telecom provides wireless, internet, TV, health, and business services. In a recession, customers may delay phone upgrades or look for cheaper plans, but they don’t usually cancel connectivity altogether. That makes telecom revenue more stable than many consumer sectors.
In the first quarter of 2026, TELUS reported consolidated operating revenues and other income of $5 billion, compared with $5.1 billion a year earlier. Service revenue still grew 1%, but lower mobile equipment revenue and other income weighed on the total. The dividend is what draws investors. TELUS declared a quarterly dividend of $0.42 per share, putting the yield near 9.7%.
Investors shouldn’t ignore the caution sign. TELUS paused dividend growth until its share price and yield better reflect its growth prospects. That tells investors management knows the payout needs discipline. Still, for income investors willing to accept risk, TELUS can provide cash flow while the market waits for stronger free cash flow growth.
Bottom line
Together, Sun Life, CP stock, and TELUS don’t offer recession-proof returns. No stock does. But they do give investors exposure to insurance, rail infrastructure, and telecom services, three areas with staying power. In a technical recession, that kind of durability can matter more than a flashy growth story.
