However, concerns remain about the potential impact of disruptions to global trade, rising valuations and a possible artificial intelligence bubble. If you want to protect your portfolio amid these risks, here are two stable Canadian stocks that can add resilience and stability.
Hydro One
Hydro One (TSX:H) is a pure-play electric transmission and distribution company with no power generation assets and minimal exposure to commodity price fluctuations. Notably, 99% of activities are covered by rate-regulated contracts, delivering stable, predictable financial results. Over the past seven years, the company has grown its interest base by 5.4% annually, supporting both financial performance and share price appreciation.
During the same period, Hydro One returned approximately 212% to shareholders, for an annualized rate of 17.7%. It has also consistently increased its dividend since 2017 at a compound annual growth rate of 5.3% and currently offers a forward yield of 2.5%.
Looking ahead, electricity demand is expected to rise significantly due to the electrification of transportation, increased investments in AI-ready data centers and economic growth. This expansion of demand will broaden Hydro One’s addressable market. The utility is actively expanding its rate base through an $11.8 billion capital investment plan, and expects to increase this 6% annually to $32.1 billion by 2027.
Supported by these growth initiatives, management expects earnings per share to grow 6-8% annually through 2027 and targets dividend growth at a CAGR of 6% over the same period. Together with its healthy growth prospects, Hydro One’s reasonable NTM (next 12 months) price-to-earnings ratio of 23.7 makes it an attractive choice for risk-averse investors.
Waste connections
Another safe Canadian stock that I remain bullish on is Waste connections (TSX:WCN), a leading provider of solid waste management services in the United States and Canada. The company operates primarily in secondary and exclusive markets, which typically have less competition and support higher margins.
Waste Connections has grown steadily through a combination of organic growth and strategic acquisitions. Over the past five years, it has completed more than 100 acquisitions, increasing annualized revenue by $2.2 billion. Backed by the essential nature of its services and its continued expansion efforts, the company has achieved strong financial growth, which has translated into impressive stock performance over the long term. Over the past decade, WCN has returned approximately 520% to shareholders – an annualized gain of approximately 20%. Furthermore, it has increased its dividend by double digits every year since 2010 and currently offers a forward yield of 0.83%.
Looking ahead, management plans to continue its active acquisition strategy, supported by a strong balance sheet and robust cash flows. The company is also focused on leveraging technology including robotics and optical sorters in recycling facilities, as well as AI tools to optimize commercial overages and maintain prices. These efforts are expected to improve efficiency and increase profitability. Meanwhile, declining voluntary employee turnover – thanks to improved engagement and stronger safety metrics – should further support margin growth.
Given the essential nature of its activities and its healthy growth prospects, WCN remains an ideal addition to a portfolio in an uncertain market environment.
#Safe #Canadian #Stocks #Buy #Hold #Market #Volatility