The Canadian stock market took a nosedive last week, with the S&P/TSX Composite Index dropping nearly 4%. Unfortunately, investors have become somewhat accustomed to this type of volatility as of late. The market as a whole has been on three 5% surges in 2023, yet it is trading at roughly the same price that it began the year at today.
Volatility is certainly nothing new to investors. The reason I’m bringing it up is to reassure those with a long-term mindset that now is not the time to be on the sidelines. The TSX is ripe with opportunities, with plenty of high-quality stocks trading at fantastic discounts.
I’ve reviewed three Canadian companies that are the types of stocks that you don’t need to worry about during volatile market periods. All three picks are very different from one another, making this a perfect basket of companies for a long-term investor with some money available to put to work.
Toronto-Dominion Bank
The Canadian banks may not be the most exciting place to invest, but, historically, the majority of them have been great long-term holds. The Big Five can provide an investment portfolio with both dependability and a heck of a lot of passive income.
Nearing a market cap of $150 billion, Toronto-Dominion Bank (TSX:TD) stands out to me for its U.S. exposure. Its 4.5% yield is in line with the other Canadian banks, but it’s the growth potential from the bank’s U.S. operations that separates itself from its peers.
Investors looking to add some dependability, passive income, and U.S. exposure should have this major Canadian bank on their watch list.
Constellation Software
Good luck trying to find many better-performing stocks on the TSX than this one over the past five- and 10-year periods. Shares may not be cheap or even trading at much of a discount from all-time highs, but there’s no question that Constellation Software (TSX:CSU) deserves its premium price.
The tech stock has largely outperformed the broader market’s returns over the past five years, returning 180% to its shareholders. In comparison, the S&P/TSX Composite Index is up less than 30%, excluding dividends.
Shares of Constellation Software are up close to 30% this year, down barely 5% from all-time highs set earlier this month.
If your portfolio is in need of some growth, this tech company isn’t showing many signs of slowing down.
Northland Power
The last pick on my list offers a mix of the first two companies reviewed. There’s a 5% dividend yield to enjoy right now, while also having the possibility of earning market-beating returns over the long term.
Like many other renewable energy stocks, Northland Power (TSX:NPI) has seen its stock price get slashed over the past two-and-a-half years. Shares are down more than 30% year to date, which explains why the dividend yield has spiked.
Recent volatility aside, the company is still primed with plenty of long-term growth potential. Demand for renewable energy doesn’t look like it will be tapering off anytime soon, which is why now could be an excellent time to invest in the renewable energy space.
