Forget Risk: 3 Safe Stocks Canadians Can Buy for Steady Returns

Risky stocks can look tempting when the upside feels exciting, especially if you have years ahead of you, but big drawdowns can quietly wreck long-term results. A 50% drop needs a 100% gain just to get back to even, and most people do not sit calmly through that kind of swing. Safer stocks tend to compound more smoothly, which makes it easier to hold on, keep contributing, and actually capture the long-term return you planned for in the first place. That’s why today, we’re looking at three of the best options.

L

Loblaw (TSX:L) looks like a “steady returns” kind of dividend stock because it sells essentials and keeps gaining scale in a business Canadians use every week. Over the past year, it delivered a roughly 25% total return, which is the kind of quiet strength that often shows up when investors want stability. In its most recent quarter, the company reported revenue growth of 4.6% and higher profitability, with adjusted diluted net earnings per share rising to $0.69. That mix of steady demand and improving earnings is exactly why many investors treat it as a defensive anchor.

Loblaw also has a few built-in safety traits that can reduce portfolio stress. Grocery demand does not disappear in a downturn, and the dividend stock’s size helps it manage costs, negotiate with suppliers, and invest in loyalty and pharmacy offerings that keep customers sticky.

The main risks are not dramatic, but they matter. Food inflation can squeeze budgets and shift buying behaviour, competition stays intense, and political or regulatory attention can create headline risk. Even with those risks, the business tends to keep earning through cycles.

WCN

Waste Connections (TSX:WCN) often feels boring in the best way, because garbage pickup does not take a recession break. Over the past year, its TSX listing fell about 4%, which might look scary. But zoom out, and it’s also a dividend stock with 86% growth in the last five years, going through a broader market correction the last few months.

In its latest quarter, Waste Connections posted revenue of US$2.458 billion versus US$2.338 billion a year earlier, and it earned US$1.11 per diluted share. That’s the slow and steady profile many long-term Canadians want when they care more about reliability than thrill.

WCN’s low-risk appeal comes from recurring contracts, pricing power, and a business that runs on necessities. It also tends to focus on markets where competition stays rational, which supports margins and cash flow over time. When you want a dividend stock that can keep compounding without needing perfect economic conditions, WCN fits that description well.

H

Hydro One (TSX:H) may be one of the cleanest examples of a Canadian sleep-well dividend stock. It operates regulated electricity transmission and distribution in Ontario, where demand stays steady, and returns are set through an approved framework.

Over the past year, the stock delivered about a 22% total return, which is strong for a utility-style business. In its most recent quarter, Hydro One reported basic EPS of $0.70, up from $0.62 a year earlier. That improvement largely came from higher revenues tied to approved 2025 rates and higher peak demand, partly offset by higher financing charges and depreciation.

H can suit investors who want steady returns with lower risk, as the business does not depend on consumer trends or commodity prices to make money. It invests in grid upgrades, earns a regulated return on that spending, and tends to produce a predictable cash flow that supports dividends. If your goal is consistent long-term compounding with fewer stomach-dropping moments, Hydro One is the kind of safe stock that can actually help you stick with your plan.

Bottom line

Safety comes with a lot of benefits, and far less terrifying excitement. And add to that a solid dividend from each of these stocks! In fact, here’s what $7,000 can bring in today.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTL$61.61113$0.55$62.15Quarterly$6,961.93WCN$242.0728$1.97$55.16Quarterly$6,777.96H$52.65132$1.33$175.56Quarterly$6,949.80

In short, while growth stocks can be fun in the short term, safer stocks like these are the far more exciting play in the long run.

The post Forget Risk: 3 Safe Stocks Canadians Can Buy for Steady Returns appeared first on The Motley Fool Canada.

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More reading

• 2 Superbly Simple Canadian Stocks to Buy With $2,000 Right Now
• Top 3 Dividend Stocks to Buy Before the Year Runs Out
• 3 Top TSX Stocks I’d Buy for 2026 and Beyond
• 3 Canadian Stocks to Buy Now and Hold for Steady Gains
• Defensive Stocks Every Canadian Investor Needs During Market Volatility

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.