On the surface, it may seem like it’s been a fairly uneventful year in 2023 for Canadian investors. The S&P/TSX Composite Index is trading just about flat through the first six months of the year. However, as those that have been invested throughout 2023 painfully know, the high levels of volatility from 2022 have continued right into this year.
The Canadian stock market initially surged more than 5% in January earlier this year. And after returning the majority of those gains in February and March, the market went on another 5% run. There was a slower decline following that run, but the market gradually returned those gains and is now back to just about the same price that it began the year at.
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Short-term bearish, long-term bullish
I’m as bullish as the next long-term Canadian investor, but I’m also realistic about what the short-term future may hold. With both interest rates and inflation remaining as high as they are today, I’m not banking on volatility slowing down just yet. That certainly doesn’t mean I’m not still investing, though.
The TSX is full of top-quality stocks that can provide a portfolio with both defensiveness and dependability in times of uncertainty.
For those looking to invest in today’s harsh climate, here are three Canadian companies that you can count on.
Royal Bank of Canada
As Canada’s largest company, valued at a market cap of $175 billion, Royal Bank of Canada (TSX:RY) provides an investment portfolio with dependability based on size alone. And once you factor in its growing international presence and a 4% dividend yield, there rarely seems to be a bad time to load up on this bank stock.
The banking sector might not scream dependability for some investors. It’s worth noting, though, that the Canadian bank sector has historically endured far less volatility than that of the U.S. during past recessions.
Fortis
Speaking of dependability, the utility sector is another area of the stock market worth exploring. Similar to Canadian banks, utility stocks can offer their shareholders defensiveness and a high yield. That’s not a bad combination in today’s economy.
Fortis (TSX:FTS) ranks as a top utility provider in Canada. The company also has operations in the U.S., providing shareholders with diversification through its international exposure.
At today’s stock price, Fortis’s dividend yields above 4%.
Constellation Software
The last pick on my list is for the growth investors. Tech stocks aren’t typically known for dependability, but not many companies on the TSX have a track record like Constellation Software (TSX:CSU).
The tech stock has been a consistent market beater ever since it went public close to 20 years ago. Growth has slowed in recent years, but shares are still up a market-crushing 130% over the past five years. In comparison, the broader Canadian stock market has returned less than 30% during that same time span.
Constellation Software is the higher-risk choice among the three TSX stocks in this basket. But for those with a long-term time horizon, the higher levels of volatility are definitely worth the market-beating growth potential.
