Amid escalating geopolitical tensions in the Middle East and renewed concerns about inflationary pressures stemming from rising crude oil prices, Canadian equity markets have come under pressure in recent sessions. Despite the recent pullback, the S&P/TSX Composite Index remains up around 13% year to date. Given the heightened market uncertainty, investors may benefit from balancing their portfolios across growth, defensive, and dividend stocks to pursue long-term returns while managing risk. With this in mind, here are my three top picks.
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Celestica
My first pick is growth stock Celestica (TSX: CLS), a leading provider of data centre infrastructure and advanced technology solutions. The rapid adoption of artificial intelligence (AI) across businesses, governments, and consumers is prompting hyperscalers to accelerate investments in AI-ready data centre infrastructure. This trend is driving robust demand for Celestica’s products and services, creating a compelling long-term growth opportunity for the company. Capitalizing on this favourable environment, Celestica is investing in innovative solutions while expanding and enhancing its production capabilities to meet growing customer demand.
The company’s strong second-quarter results reflect its growth momentum, following which management raised its 2026 outlook. Celestica now expects revenue and adjusted earnings per share (EPS) to increase 65% and 87%, respectively, year over year. Management also anticipates growth to accelerate in 2027, supported by robust customer demand and an expanding pipeline of new program wins.
Meanwhile, Celestica has experienced a meaningful correction amid broader weakness in AI-related stocks, trading about 38% below its 52-week high. Given its exceptional financial growth, strong demand outlook, expanding AI exposure, and recent pullback, Celestica offers an attractive entry point for long-term investors.
Fortis
Second on my list is Fortis (TSX: FTS), an attractive defensive investment backed by its highly regulated and low-risk utility operations. The company serves approximately 3.5 million customers across Canada, the United States, and the Caribbean, providing essential electricity and natural gas services. With most of its assets concentrated in low-risk transmission and distribution businesses, Fortis generates stable, predictable cash flows, helping it deliver consistent financial results across varying economic conditions. Reflecting the resilience of its business model, the company has generated an average annual shareholder return of approximately 9.8% over the past 20 years. It has also increased its dividend for 52 consecutive years and currently offers a forward yield of 3.35%.
Looking ahead, demand for Fortis’s essential services could continue to rise, supported by economic and customer growth as well as the rapid expansion of AI-ready data centres, which require significant amounts of electricity. To capitalize on these opportunities, Fortis is executing a five-year capital investment plan of $28.8 billion. These investments could expand its rate base at an annualized rate of approximately 7%, reaching $57.9 billion by 2030. A growing rate base should support further earnings and dividend growth, while potentially providing a solid foundation for long-term share-price appreciation.
Enbridge
My final pick is Enbridge (TSX: ENB), a high-quality income stock that has increased its dividend for 31 consecutive years and currently offers a forward yield of 5.50%. The diversified energy infrastructure giant operates a highly contracted and regulated business model, with approximately 98% of its earnings generated from long-term take-or-pay contracts or regulated assets. Moreover, a significant portion of its earnings is protected by inflation-linked mechanisms, helping the company generate stable and predictable cash flows. This resilient financial profile has enabled Enbridge to consistently reward shareholders through reliable dividend payments and regular payout increases.
Looking ahead, rising oil and natural gas production and consumption across North America should continue to support demand for Enbridge’s extensive infrastructure network. To capitalize on these opportunities, the company has identified approximately $50 billion in potential growth projects and plans to invest $10 billion to $11 billion annually to fund its expansion initiatives. As these projects come online, Enbridge expects earnings and cash flow to grow at an annualized rate of approximately 5%, providing a solid foundation for continued dividend growth and sustainable long-term shareholder returns.
