While no stock investment is safe, the TSX offers several stocks that tend to hold up better during periods of market volatility. These companies are often found in defensive sectors such as utilities and consumer staples, where demand for products and services remains relatively stable regardless of broader economic conditions.
Many of these low-volatility Canadian stocks are also market leaders with strong fundamentals. They generate reliable cash flows, maintain healthy balance sheets and follow disciplined capital allocation strategies. These stocks add stability to your portfolio even when market sentiment turns cautious.
Against this backdrop, here are two Canadian stocks that are relatively safe to buy now and hold during market volatility.
Dollarama shares
Dollarama (TSX:DOL) stock is a defensive strategy that offers stability, income and growth. The discount retailer has rewarded shareholders with consistent returns, supported by a business model that continues to perform well across economic cycles. The share has risen more than 48% in one year. Moreover, it is up almost 288% over the past five years, delivering an above-average return.
Dollarama’s financials and stock price are driven by its value-oriented strategy. The company sells everyday essentials, seasonal items and general merchandise at low, fixed prices. This pricing strategy resonates with consumers regardless of economic conditions, ensuring stable demand and resilient profits.
Looking ahead, Dollarama appears well positioned to maintain above-average growth. The retailer is expanding its store network in Canada while entering international markets. The new stores have low maintenance costs and fast payback times, making expansion efficient.
Dollarama is also adapting to changing shopping habits by growing its presence on third-party delivery platforms, increasing convenience and creating opportunities for incremental sales. The balanced mix of national brands and private label products helps attract a broad customer base while maintaining healthy margins. Moreover, the focus on direct purchasing results in a lower operating result.
The recent acquisition of Australia’s The Reject Shop provides geographic diversification and expands Dollarama’s global footprint.
Looking ahead, Dollarama is well positioned to deliver steady growth and above-average capital gains. Furthermore, the value retailer has consistently increased its dividend since 2011 and dividend growth is likely to continue. Overall, Dollarama is a reliable stock to buy and hold in all market conditions.
Fortis shares
Investors looking for stocks that can add stability to their portfolios amid market volatility may want to consider Canadian utility stocks. These companies provide essential services such as electricity and natural gas that households and businesses depend on regardless of economic conditions. Because these services are regulated, cash flows are often predictable, supporting steady earnings growth and reliable dividend payments.
Within this sector Fortis (TSX:FTS) is an attractive investment option. The company’s defensive business model is anchored in interest-regulated assets, which provide visibility into future earnings and cash flows. This structure has enabled Fortis to maintain and consistently increase its dividend over various market cycles. It is notable that the company has increased its dividend for 52 years in a row.
Fortis focuses primarily on the transport and distribution of electricity and gas, and not so much on the generation of electricity. This limits exposure to commodity price fluctuations and operational risks associated with energy generation. As a result, revenues tend to be more stable.
The company’s growth prospects further strengthen its investment opportunities. Fortis plans to invest $28.8 billion to expand its regulated asset base. These investments are expected to determine the interest rate base and support management’s expectation of increasing the dividend by 4% to 6% annually. Moreover, the rising demand for electricity from sectors such as production and data centers could eventually lead to gradual growth.
Overall, Fortis shares offer stability, consistent dividend growth and modest growth.
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