Canadian banks can be great long-term holdings, but there is a point where owning too many of them may start to work against you. If several stocks in your portfolio depend on the same interest-rate trends, credit conditions, and economic growth, they could all come under pressure at the same time. That is why portfolio diversification matters. The goal isn’t to avoid bank stocks, but to add businesses that generate earnings in different ways. Utilities, agriculture, infrastructure, and other sectors can help diversify risk while keeping a portfolio focused on strong Canadian companies.
In this article, I’ll highlight two top TSX stocks that could help you diversify beyond the big banks without giving up dividends or long-term growth potential.
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Hydro One stock
If you like investing in banks because of their defensive business model, Hydro One (TSX: H) could be an interesting stock to watch.
This Toronto-based company is Ontario’s largest electricity transmission and distribution provider. Following a rally over the past three weeks, Hydro One stock currently trades around $55 per share with a market cap of $33.1 billion. At that price, it also offers a 2.6% annualized dividend yield.
The company’s revenue rose about 11% year-over-year (YoY) in the second quarter to $2.3 billion. This drove its net profit up by 13% YoY to $370 million. Higher Ontario Energy Board-approved rates and stronger peak electricity demand supported the improvement.
Beyond its latest results, Hydro One continues to invest heavily in Ontario’s electricity network. The company has filed applications for several major transmission projects, including the roughly $1.9 billion Northeast Power Line and the $1.2 billion Longwood to Lakeshore Transmission Line.
Overall, Hydro One’s essential electricity infrastructure, ongoing capital investment, and dividends give investors a different set of earnings drivers. If you have a portfolio heavy on Canadian banks, all these factors make Hydro One an attractive diversification option for the long run.
Nutrien stock
For investors looking to diversify even further, Nutrien (TSX: NTR) could give exposure to global agriculture and fertilizer markets.
In short, this Saskatoon-based company supplies crop nutrients and agricultural products through its Retail, Potash, Nitrogen, and Phosphate businesses. After climbing nearly 12% so far in 2026, NTR stock currently trades at $97 per share with a market cap of $46.2 billion and a 3.2% annualized dividend yield.
Nutrien’s latest results show why investors have been growing confidence in the stock. Its second-quarter sales inched up 4% YoY to US$10.8 billion, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) fell 2% to US$2.43 billion. Higher global fertilizer benchmark prices helped, but lower fertilizer volumes and increased sulfur costs weighed on the quarter.
Nevertheless, Nutrien’s net earnings in the first half of the year rose 9% YoY to US$1.36 billion, while adjusted EBITDA climbed 6% to US$3.5 billion.
Moreover, the company is advancing mine automation, reliability improvements, portfolio optimization, and non-core asset sales as it works to strengthen free cash flow. These efforts could accelerate its growth further in the years to come.
For investors with heavy exposure to Canadian banks, Nutrien could provide a very different source of growth tied to food production and global crop input demand.
