Slowdowns test conviction. When the economy loses speed, investors often rush toward the obvious safe havens. Banks, utilities, and telecom stocks usually get first look. That makes sense, but a slowing economy doesn’t mean every growth stock suddenly becomes too risky, or every defensive stock becomes too expensive. Sometimes, the best ideas sit in companies that can keep selling because demand doesn’t disappear when consumers grow cautious.
That’s why Loblaw (TSX:L) and MDA Space (TSX:MDA) look interesting today. One sells essentials Canadians buy every week. The other builds space systems tied to long-term government, defence, and communications demand. They come from very different corners of the TSX, but both offer something useful when growth slows: a reason for revenue to keep moving.
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Loblaw looks like the steadier pick. The company owns grocery, pharmacy, discount, and financial services banners, including Loblaws, No Frills, Real Canadian Superstore, Shoppers Drug Mart, and PC Financial. That gives it a powerful place in Canadian household budgets. People may trade down when money feels tight, but they still need food, prescriptions, and basic household goods.
That trade-down trend can actually help Loblaw. Discount banners such as No Frills and Maxi can attract shoppers trying to stretch each dollar. Meanwhile, Shoppers Drug Mart gives the company exposure to pharmacy and health products, which can hold up better than discretionary categories during a slowdown.
The latest quarter showed that resilience. In the first quarter of 2026, Loblaw reported revenue growth of 4.2%. Adjusted diluted earnings per share (EPS) rose 10.6%. Same-store sales climbed 2.4% in food retail and 4.1% in drug retail. That’s not explosive growth, but it’s exactly the kind of steady performance investors often want when the broader economy looks shaky.
Loblaw also continues to return cash to shareholders. Its dividend yield sits near 1%, so this isn’t a high-income story. The real appeal comes from earnings growth, scale, and consistency. The stock has already done well, so valuation risk matters. If shoppers push back against prices or regulators keep pressure on grocers, sentiment could weaken. Still, Loblaw remains one of the clearest defensive growth stocks on the TSX.
MDA
MDA stock brings more upside and more volatility. The company provides satellite systems, robotics, space sensors, and mission solutions. It’s not a consumer stock, which makes it useful in a slowdown. Its demand comes from governments, space agencies, defence customers, and commercial satellite operators. Those budgets don’t move in perfect sync with Canadian retail sales or housing activity.
That’s especially relevant now as space has become more than a moonshot theme. Countries want better surveillance, communications, navigation, and defence capabilities. Companies want satellite connectivity and data. MDA stock sits right in that mix, with a Canadian identity and global customer base.
Its first-quarter 2026 results were strong. Revenue rose 32% year over year to $464 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 32.1% to $90.6 million, and MDA stock ended the quarter with a $3.7 billion backlog. That backlog gives investors visibility, which matters when the economy slows and confidence becomes scarce.
The risk, of course, is price. MDA stock surged over the last year, and its valuation now reflects big expectations. Any delay in major programs, margin pressure, or contract disappointment could hit the stock hard. This is not a sleepy defensive name, so investors need patience and a strong stomach.
Bottom line
That balance helps. One stock can calm a portfolio when consumers pull back. The other can add growth when markets start rewarding companies again with large backlogs and specialized technology over time.
Even so, Loblaw and MDA stock both offer something worth owning. Loblaw brings essential spending and stability, MDA stock brings structural growth tied to space and defence. If the economy keeps slowing, investors don’t need to hide completely. They just need companies with demand strong enough to keep working through the cycle.
