The Canadian equity markets have maintained upward momentum, with the benchmark S&P/TSX Composite Index up 0.7% this month and 15.1% year to date. Improving corporate earnings and higher commodity prices have supported the market’s advance. However, uncertainty surrounding Canada-U.S. trade negotiations, renewed inflationary pressures stemming from higher oil prices, and persistent geopolitical tensions continue to pose risks to the broader market outlook.
Against this uncertain backdrop, investors may want to focus on companies with well-established and essential businesses, resilient cash flows, and attractive long-term growth prospects. With these qualities in mind, the following two stocks could be compelling buys. Let’s take a closer look at each of them.
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Dollarama
Dollarama (TSX: DOL) is a leading Canadian discount retailer built around a highly efficient direct-sourcing model. By eliminating intermediaries, the company keeps costs low while enhancing its purchasing power. Its streamlined operations and optimized logistics further support efficiency, allowing Dollarama to offer a broad range of everyday products at attractive prices. This compelling value proposition helps sustain strong customer traffic across varying economic and market conditions.
Dollarama is also pursuing an aggressive store expansion strategy. The company plans to increase its Canadian store base from 1,719 to 2,200 and its Australian footprint from 410 to 700 by the end of fiscal 2034. Supported by rapid store-level sales ramp-ups, relatively short payback periods, and modest maintenance capital requirements, this expansion could provide a durable runway for revenue and earnings growth. Additionally, Dollarama is developing a new logistics hub in Calgary, which could become operational by the end of 2027. The facility should strengthen its distribution network and facilitate further expansion across Western Canada.
Beyond its core markets, Dollarama has significant exposure to the rapidly expanding Latin American discount retail market through its 60.1% stake in Dollarcity, which currently operates 752 stores across the region. Dollarcity is targeting 1,050 stores by the end of fiscal 2031, providing another meaningful avenue for long-term growth. Furthermore, Dollarama can increase its ownership stake to 70% by the end of next year, which could further enhance its participation in Dollarcity’s growth.
With an efficient, resilient business model, multiple avenues for store expansion, and growing exposure to international markets, Dollarama appears well positioned to deliver sustained growth. Given these strengths, the stock could be an attractive long-term buy despite the prevailing market uncertainties.
Fortis
Another stock worth considering is Fortis (TSX: FTS), a regulated utility serving about 3.5 million electricity and natural gas customers across Canada, the United States, and the Caribbean. Its highly regulated asset base and low-risk utility operations provide stable, predictable cash flows, reducing exposure to commodity price swings and broader market volatility. This resilient business model has helped Fortis deliver an average annual shareholder return of approximately 9.8% over the past 20 years and increase its dividend for 52 consecutive years. Its quarterly dividend of $0.64 per share currently translates into a forward yield of approximately 3.3%.
Looking ahead, Fortis is expanding its asset base to capitalize on rising electricity demand driven by economic growth, transportation electrification, and the rapid development of AI-powered data centres. The company plans to invest $28.8 billion through 2030, supporting approximately 7% annualized growth in its rate base to $57.9 billion. At the same time, Fortis continues to focus on operational efficiencies, disciplined capital allocation, and technological innovation to contain costs and improve affordability for customers.
With these investments expected to support steady earnings and cash-flow growth, management targets annual dividend growth of 4% to 6% over the coming years. Combined with its defensive business model, regulated cash flows, and long track record of dividend growth, Fortis could be an attractive defensive investment amid the current market uncertainty.
