3 Canadian Stocks That Could Outperform if Growth Stays Soft

Canadian stocks that will likely outperform in a weak economy are defensive, and they include Enbridge and Well Health,

Karen Thomas, MSc, CFA

Karen is a stock market enthusiast focused on uncovering those stocks that she believes the market has mispriced. She does this through fundamental and quantitative analysis of companies and their industries, as well as a study of future opportunities and trends. She holds a Masters degree in Finance, the CFA designation, and has over 20 years of experience in the investment management industry. Having worked at a major pension fund, as well as two leading mutual fund firms as an analyst and portfolio manager, she has solid investing expertise which she aims to share with her readers.

Published June 25, 4:40 pm EDT

| More on: ENBCGXWELL

Key Points

Canada's GDP declined 0.1% in Q1 2026 following a 0.2% Q4 drop due to weak business investment and exports, though personal consumption remained strong and the OECD expects growth to strengthen as trade tensions ease and government spending increases.
Cineplex offers recession-resistant entertainment at 18 times forward earnings with May box office revenue of $60.5 million (highest since 2019, up 9.4%), while Enbridge's regulated utility and long-term contracted energy infrastructure business provides predictable cash flows and a generous 4.87% yield that appears undervalued.
Well Health Technologies is insulated from economic weakness as an essential healthcare provider, with Q1 revenue up 25% and adjusted net income doubled as it rapidly expands primary care clinics using technology that improves efficiency and patient care in a highly fragmented market.

Canada’s gross domestic product (GDP) recorded a 0.1% decline in the first quarter of 2026. This followed a fourth quarter decline of 0.2%, and it has some of us worried. How do we invest if growth remains weak? What are the best Canadian stocks to buy that are likely to outperform if this is the case?

Let’s look into this.

man is enthralled with a movie in a theater — Source: Getty Images

The Canadian GDP number – the pros and cons

Weak GDP numbers have been the result of low business investment and weak exports. U.S. trade uncertainty is certainly to blame, as is the general perception of an increasingly risky macro-economic environment.

On the pro side, personal consumption held strong and inflation remained under control. Also, the OECD is expecting GDP growth to strengthen over 2026 and 2027. This is expected as the economy recovers from trade-related tensions and as the government increases spending on defence and infrastructure.

This being said, I think it’s prudent to fortify one’s portfolio, ensuring it’s protected should the economy head south.

Cineplex

My first recommendation is Cineplex Inc. (TSX:CGX), Canada’s premier movie exhibition and gaming company. Cineplex has a dominant market share (80%+) in the movie exhibition industry, which is an industry that has proven to be resilient in times of recession. And this industry has been recovering.

Should the economy remain weak, I think that Cineplex stock will be an outperformer. During recessionary times, movie-watchers have continued to spend on this comparatively cheap form of entertainment for a much-needed escape.

Yet, Cineplex stock continues to trade at depressed levels of 18 times next year’s earnings estimate. This valuation does not give the company credit for the underlying resilience of its business. A business that’s showing signs of recovery even as Canadian GDP numbers are weak. For example, box office revenues of $60.5 million in May was the highest since 2019 and 9.4% higher than last year.

Theatrical windows are increasing, debt is falling, and Cineplex stock looks set to move higher even in a soft economy.

Enbridge

As one of North America’s top energy infrastructure companies, Enbridge Inc. (TSX:ENB) is a stock that I expect will also outperform in the event that the economy remains soft.

Enbridge stock is currently enjoying record energy demand. With revenue that’s split between its utility segment and its midstream infrastructure, Enbridge has amassed a revenue stream that’s largely regulated and/or under long-term contracts. This means that it’s pretty safe and predictable, with little downside risk.

Today, Enbridge stock is yielding a very generous 4.9% despite the company’s stable and defensive business. In my view, there’s a disconnect between Enbridge stock’s fundamentals and its valuation – and this disconnect will not last. The company’s predictable cash flows are deserving of a much higher valuation.

Well Health Technologies

The last Canadian stock that should outperform if growth stays soft is Well Health Technologies Corp. (TSX:WELL). Well Health is an omnichannel digital healthcare provider, with primary care clinics, diagnostics clinics, and specialty clinics under its umbrella.

Well Health is expanding its Canadian primary care clinics at a rapid pace, and the opportunity is still large in this highly fragmented market. The company’s value proposition for doctors is clear. Well Health’s technology improves efficiencies, increases margins, frees up time for doctors to concentrate more on patient care, and it improves patient care. Last quarter, Well Health’s revenue increased 25%, and its adjusted net income doubled.

This is a business that’s pretty insulated from and independent of the economy as healthcare is an essential industry. But regardless of this, Well Health stock is attractive under any scenario, as the company is having a positive impact financially and operationally, as well as on the quality of care that patients receive.

The bottom line

Some of the best Canadian stocks to own in a weak economy are outlined in this article. These are stocks that I expect will be resilient even if the Canadian economy remains weak as their businesses are relatively defensive and immune to economic happenings.