Investing in Large Caps

Large-cap stocks represent shares in some of the most established, financially stable companies in the Canadian market. These firms typically have market capitalizations above $10 billion, long track records of revenue and profit, and leadership positions in their respective industries. While no stock is completely immune to market fluctuations, large-caps tend to be less volatile than smaller companies and are often better equipped to weather economic downturns, making them a reliable anchor for diversified portfolios.

In Canada, large-cap stocks are especially prominent in sectors such as financials, energy, telecommunications, and consumer staples, which together account for a significant portion of the S&P/TSX Composite Index. These companies not only contribute meaningful weight to the overall index, but also often deliver steady dividends and resilience during market stress, characteristics many investors seek as part of a long-term allocation.

For investors in 2026, large-caps can offer a compelling blend of stability, income, and moderate growth potential, particularly amid lingering inflationary pressures and shifting global demand. But what exactly qualifies as a large-cap stock, and which Canadian companies stand out as top investment candidates today? Let’s break down the fundamentals and explore some of the top Canadian large-cap stocks to watch.

What are large-cap stocks? 

By definition, large-cap stocks represent partial ownership in companies with market capitalizations of $10 billion or higher. Recall that market capitalization refers to the total value of a company’s stock. For instance, if a company has 100 million outstanding shares, with each one worth $100, then we’d say that company has a market cap of $10 billion (100 million x $100), and we would consider it a large-cap stock. 

Though large-cap stocks are a diverse bunch, they tend to exhibit similar characteristics. For instance, many large-cap companies are leaders in their industry. They’re often companies that many people have heard of, not just nationally, but worldwide. Because of their size, their share prices typically move with the broader economy, and they often influence broader markets and stock indices, too. 

Usually large-caps will pay out dividends, often with high dividend payout ratios. Though they are more stable than small-caps and mid-caps, large-caps typically don’t experience immense growth. That doesn’t mean they won’t grow. But more often than not they’ve reached a peak in their business, with upward growth being small but steady. 

What are examples of large-cap stocks in Canada? 

To find examples of large-cap stocks in Canada, you don’t have to look far. If you’d like to add some large-cap stocks to your portfolio, below are five stocks you might want to consider. (note that previous companies on this list such as Shopify (TSX:SHOP) and Royal Bank of Canada (TSX:RY) have grown out of the large-cap level and into the mega-cap stocks with over $200 billion in market cap values).

BCE

Despite a prolonged share price decline over the past four years, BCE (TSX:BCE) remains one of Canada’s most dominant telecom companies and has effectively crossed into mega-cap territory. With a market capitalization approaching $30 billion, BCE continues to generate stable cash flows from its wireless, broadband, and media businesses. What keeps income-focused investors interested is its 5.45% dividend yield, making it one of the TSX’s highest paying dividend stocks. While growth has been muted, BCE’s scale, infrastructure assets, and recurring revenue base reinforce its status as a mega-cap defensive holding. 

Barrick Mining

Barrick Mining (TSX:ABX) has surged into mega-cap status as gold prices and operating performance have strengthened. Trading near all-time highs, Barrick now boasts a market capitalization of roughly $100 billion, placing it among Canada’s largest publicly traded companies. The miner offers investors exposure to gold and copper through a diversified global asset base, while still returning capital via a 1.66% dividend yield. With its size, balance sheet strength, and leverage to commodity prices, Barrick has firmly outgrown its former large-cap classification.

Canadian National Railway

Canadian National Railway (TSX:CNR) is one of North America’s largest freight rail networks, operating over 32,000 kilometers of track across Canada and the U.S. As a large-cap stock with a market cap of $83 billion and key member of the S&P/TSX 60 Index, CNR is essential to the movement of goods across sectors like energy, agriculture, and manufacturing. Known for its efficiency, dividend growth, and strategic cross-border reach, it’s a core holding for investors seeking stable, long-term exposure to the transportation sector.

Suncor Energy

Suncor Energy (TSX:SU) is one of Canada’s largest and most popular energy stocks, with a market cap of $70 billion. With a high-quality management team that oversees massive oil-producing operations, not to mention manages 1,800 retail gas stations across the country, Suncor is a resilient stock that can offer Canadians investors some stability. Side note: Warren Buffett once owned shares in Suncor, one of the few Canadian stocks he has ever held. 

Fortis 

Fortis (TSX:FTS) has a market cap that hovers around $36 billion, securing its place in the large-cap club. Because around 99% of Fortis’ earnings come from regulated utilities (read: Canadians need its services), it remains relatively unscathed by market volatility. The company has increased its dividend payout 52 years in a row, and, with its pledge to expand services in the renewable energy sector, this is certainly a company that has some potential growth in its future.  

Other large-cap stocks in Canada include:

• Enbridge
• Scotiabank
• Bank of Montreal 
• Thomson Reuters 
• CIBC 
• TC Energy 
• BCE 
• Constellation Software 
• Loblaw

What are the advantages of investing in large-cap stocks? 

The most obvious advantage to large-cap stocks is their stability. While, sure, large-caps aren’t immune to market volatility, they can certainly fare better in bad times than, say, mid- and small-caps. For this reason, large-caps can form a pivotal place in your investment portfolio, helping you diversify your holdings, while also helping you capitalize on a big company’s gains. 

Secondly, large-caps have a familiarity advantage (especially for beginners). Most investors have heard of large-cap companies. Shopify. Royal Bank of Canada. lulu. These are companies whose products and services we know fairly well, even if we’re not their most loyal brand advocates. Unlike small-cap companies, which are unknown and thus require more research, you typically have a head start with large-caps, as you don’t need to spend too much time understanding what the company sells. 

Finally, large-cap stocks often pay out dividends to investors. Whether you’re looking for an investment that generates income, or you want a little extra in addition to your gains, dividends can help make up for the fact that large-caps don’t often explode in growth.  

What’s the difference between large-cap and mega-cap? 

Large-cap stocks are pretty big. But they’re not the biggest in terms of market capitalization. That place is reserved for the infamous mega-cap stocks. 

Mega-caps are companies that have market capitalizations of $200 billion or higher. Only a dozen or so companies have reached this exclusive status, and only one of which resides in Canada (Shopify). For more examples of mega-stocks, you’ll have to look south of the border: Amazon, Apple, Coca-Cola, Johnson & Johnson, and Verizon are all American mega-caps you can buy through your online broker. 

Large-cap vs. mid-cap vs. small-cap vs. micro cap 

Mid-cap stocks represent shares in companies with market caps between $2 billion and $10 billion. Mid-caps can be attractive to investors, as they often offer the best of both worlds, both potential for upward growth along with some stability. Of course, even though many mid-cap companies are growing, many more have fallen back in growth, occupying the “middle position” after a period of constant upward growth. For that reason, mid-caps can be more risky than large-caps, as you can never be sure if these stocks will ever become the market leaders you hope they will be. 

Below mid-caps, we have small-caps, which have market capitalizations between $300 million and $2 billion. Because of their size, small-caps are more risky than large- and mid-cap stocks, as market downturns could easily crush their worth. But risk isn’t always bad: small-caps can be start-ups with explosive ideas, ones that could propel the young company to the mid-cap or even large-cap range. And, because of their potential to grow, they can offer investors the potential to “hit it big” with the right company. 

Finally, we have microcaps. Microcaps have market capitalizations between $50 and $300 million. These companies are so small, you often won’t find them on the TSX. They can be fairly risky, much more risky than all the caps above. But, like small-caps, microcaps can represent immense growth, especially if the company has a solid business model and an idea that’s bound to catch on.    

Cap-size Comparison Table

Here is a table outlining the key differences between mega-cap, large-cap, mid-cap, small-cap, and micro-cap stocks, along with examples of Canadian companies listed on the Toronto Stock Exchange (TSX):

Should you invest in large-cap stocks? 

For investors who are new to stock investing, or whose risk tolerance is fairly low, large-cap stocks might be a good fit. Alternatively, if your investment portfolio is composed of volatile growth stocks, and you’d like to add some stability to your stocks, large-caps can certainly help diversify your holdings. 

Of course, as with other stocks, you should always research the companies in which you want to invest. Even though large-cap stocks are fairly stable, you don’t want to invest in companies “just because.” Armed with solid knowledge of how large-cap companies work, as well as what the future holds, you can avoid investing in a stagnant stock. 

For those investors who aren’t interested in researching or using value metrics to evaluate large-cap stocks, you could buy shares in a large-cap focused exchange-traded fund (ETF). An ETF manager will handpick large-cap stocks for you, and you can profit off the general movement of the fund’s index.

ETFs focused on large-cap Canadian stocks

Vanguard FTSE Canada Index ETF (TSX: VCN)
The Vanguard FTSE Canada Index ETF (VCN) offers broad exposure to the Canadian equity market by tracking the FTSE Canada All Cap Index, which includes large-, mid-, and small-cap companies. Despite its broad mandate, the fund is heavily weighted toward large-cap stocks, which typically comprise around 75% of the portfolio. This makes VCN functionally similar to a large-cap fund for most investors. With a low management fee of 0.05%, it is a cost-effective option for gaining diversified exposure to Canada’s top publicly traded companies across sectors such as financials, energy, and industrials.

iShares S&P/TSX 60 Index ETF (TSX: XIU)
The iShares S&P/TSX 60 Index ETF (XIU) is Canada’s oldest and most traded ETF, providing targeted exposure to the 60 largest and most liquid companies on the Toronto Stock Exchange. Tracking the S&P/TSX 60 Index, it focuses exclusively on large-cap stocks, making it a pure large-cap fund ideal for investors seeking stability and consistent dividends. With holdings in sectors like financials, energy, and industrials, XIU is a core holding for many long-term Canadian investors. It has a management fee of 0.18%, and its high liquidity makes it particularly attractive for both retail and institutional investors.