Canadian equity markets have turned volatile in recent weeks, with the benchmark S&P/TSX Composite Index retreating 3.8% from its recent highs. Ongoing conflict in the Middle East, persistent inflation, and trade uncertainties have weighed on investor sentiment and driven market volatility. In this uncertain environment, investors should consider diversifying across growth, dividend, and defensive stocks to balance capital-appreciation potential with income generation and portfolio stability.
Against this backdrop, here are my three top Canadian stock picks.
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Enbridge
My first pick is Enbridge (TSX: ENB), a compelling dividend stock that has increased its dividend for 31 consecutive years. It currently offers an attractive forward yield of 5.8%. The company operates more than 200 revenue-generating energy assets, with regulated assets and long-term take-or-pay contracts supporting about 98% of its earnings. Inflation-linked mechanisms protect about 80% of its earnings, reducing exposure to macroeconomic fluctuations and commodity price cycles. This resilient business model supports predictable cash flows, enabling Enbridge to sustain its dividend payments and deliver consistent dividend growth over the years.
Looking ahead, Enbridge plans to capitalize on rising demand for its infrastructure and services and has identified about $50 billion in growth opportunities through the end of this decade. It plans to invest $10 billion to $11 billion annually to fund these projects. With these investments, the company expects adjusted earnings per share (EPS) and distributable cash flow per share to grow about 5% annually in the coming years. As these expansion initiatives strengthen its long-term growth outlook, management expects to return $40 billion to $45 billion to shareholders by the end of the decade, providing greater visibility into future dividend payments and shareholder returns.
Celestica
My second pick is Celestica (TSX: CLS). This high-growth stock has delivered an exceptional return of over 1,330% over the past three years, translating into an annualized return of approximately 143%. Looking ahead, the growing adoption of artificial intelligence (AI) across enterprises, governments, and consumers is driving hyperscalers to expand their data centre infrastructure, creating significant long-term growth opportunities for Celestica.
Capitalizing on this favourable industry backdrop, the company is expanding its advanced technology solutions, scaling manufacturing capabilities, and broadening its customer base to strengthen its competitive position and capture emerging opportunities. Following its strong second-quarter results, Celestica raised its 2026 guidance, projecting revenue and adjusted earnings per share (EPS) growth of 65% and 87%, respectively. Management also expects growth to accelerate next year amid sustained customer demand and an expanding pipeline of new program wins.
Despite its impressive share price appreciation, Celestica’s valuation remains reasonable, with next-12-month price-to-sales and price-to-earnings multiples of 1.5 and 24.3, respectively. Given its strong growth momentum, expanding market opportunities, and attractive valuation, I believe Celestica could be a compelling long-term investment.
Dollarama
My final pick is Dollarama (TSX: DOL), a defensive retailer with attractive growth prospects. Its efficient operating model, direct-sourcing capabilities, and optimized logistics enable it to offer a broad range of consumer products at competitive prices. These value-driven offerings support resilient consumer demand and healthy same-store sales, even amid economic uncertainty. Further, Dollarama continues to expand its store network, targeting an increase in its Canadian locations from 1,734 to 2,200 and its Australian footprint from 414 to 700 stores by the end of fiscal 2034.
Additionally, Dollarama has significant exposure to Latin American markets through its 60.1% stake in Dollarcity, which operates 781 stores across the region. Dollarcity is also pursuing an aggressive expansion strategy, aiming to increase its store count to 1,050 by the end of fiscal 2031. Moreover, Dollarama can raise its ownership stake in Dollarcity to 70% by the end of next year, potentially strengthening its participation in the subsidiary’s future growth.
Given its resilient business model, ongoing store expansion, and exposure to multiple growth markets, I believe Dollarama is a compelling long-term investment to consider despite the uncertain macroeconomic environment.
