The 5 Canadian Stocks So Safe I’d Tell My Mother to Buy Them

These five Canadian stocks combine durable businesses, strong competitive positions, and long-term resilience for cautious investors.

Key Points
  • Stable, Essential Industries: Canadian National Railway and Canadian Utilities offer stable revenue streams and long-term growth, with dividends bolstered by essential services and economic resilience.
  • Growth and Stability Fusion: Royal Bank, Alimentation Couche-Tard, and Brookfield Infrastructure add diversity through growth potential, defensive market positions, and a blend of regulated cash flows.
  • Diversification and Risk Management: Including a variety of industries and strengths, these stocks provide defensive moats and growth prospects, ideal for a diversified, long-term portfolio.

There’s no shortage of great Canadian stocks on the market for investors to consider. That being said, I would only recommend a few of them to my closest friends and family. That’s because I know they aren’t going to be watching every market movement or news headline.

And it’s worth noting that no stock is immune to volatility. Share prices will drop, recessions happen, and even the strongest investments face challenges.

That’s why if I were asked for five Canadian stocks to buy and hold for years, I would turn to more established businesses that have steady demand, growth potential, and maybe some income-earning prospects too.

Here are the five Canadian stocks I would prioritize in a portfolio right now.

woman gazes forward out window to future

Source: Getty Images

Start with Canadian stocks that can be understood

A friend once told me that if you can explain how a business makes money, then you can understand if it will continue to make money.

That’s the case when it comes to the first two Canadian stocks, Canadian National Railway (TSX: CNR) and Canadian Utilities (TSX: CU).

Canadian National Railway operates a massive rail network that connects three coastlines across North America. The railway hauls over $250 billion worth of goods each year across that network.

This gives it an enormous competitive advantage. Many of those goods are essential products or raw materials for other products. As a result, Canadian National is able to generate a recurring revenue stream that has allowed the company to increase its dividend each year for the past three decades.

Turning to Canadian Utilities, that stability comes through differently. Canadian Utilities is a regulated utility, providing electricity and natural gas service to customers regardless of how the economy is moving.

Like Canadian National, this allows the company to generate a stable revenue stream that lets Canadian Utilities invest in growth initiatives and pay a quarterly dividend.

In fact, that stability has allowed Canadian Utilities to provide annual upticks to that dividend for 54 consecutive years. That’s the longest dividend increase streak in Canada.

The company also has a capital plan that extends through 2030, with $12 billion targeted to grow its rate base and earnings.

Add some growth into the mix

Once that stable foundation is built, the other three Canadian stocks I would consider are Royal Bank (TSX: RY), Alimentation Couche-Tard (TSX: ATD) and Brookfield Infrastructure (TSX: BIPC).

Each brings something different to the portfolio.

Royal Bank is the largest of Canada’s big bank stocks. The company operates under personal banking, wealth management, insurance and capital markets segments.

Canada’s big banks are often regarded as great investments to consider because of their well-regulated domestic market, long-term growth potential, and handsome dividends.

In the case of Royal Bank, not only does the bank offer that stability, but it also boasts over a century of dividend payments and growth.

Alimentation Couche-Tard offers more of a growth tilt. The company is one of the largest convenience store and gas station operators on the planet.

It’s also one of the most defensive. People need to buy fuel, food and everyday essentials, even when the market isn’t cooperating. Couche-Tard combines that recurring demand with a massive footprint and history of acquisitions.

Wrapping up the portfolio is Brookfield Infrastructure. Brookfield owns essential infrastructure assets around the globe. That includes utilities, transportation assets, midstream, and even data assets.

Many of those assets generate contracted or regulated cash flows, providing some utility-like stability.

Adding to that appeal is Brookfield’s dividend and long-term growth potential. As of the time of writing, Brookfield offers a quarterly dividend that carries a yield of 4.9%.

The company is also targeting annual distribution growth of that dividend to fall between 5% and 9%, making it a great long-term holding.

The safest stock is still the one you can hold

All stocks, even the most defensive, carry risk. That’s why the importance of diversifying can’t be stated enough.

Fortunately, the five stocks mentioned above all offer unique moats with defensive appeal that complement their growth and income-earning potential.

In my opinion, one or all of the above would be great core holdings in a larger, well-diversified portfolio. Even a portoflio held by my family and closest friends.

Fool contributor Demetris Afxentiou has positions in Canadian National Railway. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Canadian National Railway. The Motley Fool has a disclosure policy.

More on Dividend Stocks

A woman stands on an apartment balcony in a city
Dividend Stocks

How Much Would You Need in a TFSA to Earn $750 a Month Tax-Free?

Earning $750 a month tax free takes about $113,000 in a TFSA. See how GO Residential REIT and Decisive Dividend…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

How I’d Structure a $50,000 TFSA to Fund My Retirement

These Canadian stocks offer diversification across different sectors and are likely to deliver solid total returns in the long term.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

Hot Take: The Best Monthly Dividend Stock on the TSX Right Now

Three TSX monthly dividend stocks are strong buys today for their yields, balance sheet strength, and cash flow sustainability.

Read more »

oil pump jack under night sky
Dividend Stocks

A 4.5% Dividend Stock That Pays Out Monthly

This 4.5% dividend stock is better positioned to continue rewarding shareholders with steady payouts across all market conditions.

Read more »

fast shopping cart in grocery store
Dividend Stocks

A Top-Notch 5% Dividend Stock to Fuel Your Retirement Income Every Month

Retirees looking for stable, monthly income should consider Choice Properties, especially on meaningful market corrections.

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

OAS Clawback Worries? I’d Check Where My Dividend Stocks Are Held

The account holding a dividend stock can change its effect on OAS, even when the cash payment is identical.

Read more »

man calculates finances
Dividend Stocks

How Much to Invest in CT REIT for $1,000 a Year in Dividends

CT REIT offers a solid investment with a 5.4% yield. Understand how it compares to other REIT options.

Read more »

traders work at stock exchange
Dividend Stocks

Dividend Income vs Selling Shares: Which Strategy Generates Better Cash Flow?

When should you sell those shares that have outperformed and take the capital gain as a lump-sum cash inflow? Let's…

Read more »