1 Canadian Stock I’d Buy Before Recession Fears Spread Further

Recession fears spread fast. One weak economic report can turn confidence into caution. Suddenly, investors stop asking which stocks can run the fastest and start asking which businesses people still need when budgets tighten. That’s where The North West Company (TSX:NWC) looks interesting.

North West stock won’t grab attention like artificial intelligence (AI), crypto, or a small-cap growth story. But when recession worries rise, boring can become useful.

About NWC

North West stock runs grocery and general merchandise stores in remote, northern, and hard-to-serve communities across Canada, Alaska, the South Pacific, and the Caribbean. In many of those markets, it doesn’t just compete for casual spending. It supplies essentials.

That makes North West stock relevant now. Canadian households already face pressure from high food costs, mortgage renewals, and slower economic growth. If recession fears spread further, investors may want businesses tied to daily needs instead of optional purchases. Food, pharmacy products, household goods, and basic services don’t disappear from shopping lists when confidence fades. Consumers may trade down or buy less, but they still need the basics.

Into earnings

The latest results show a company holding its ground in a tougher environment. For the year ended January 31, 2026, North West stock reported sales of $2.6 billion, up slightly from $2.58 billion the year before. Net earnings attributable to shareholders rose to $139.5 million from $137.3 million. Basic earnings per share (EPS) came in at $2.92, up from $2.87.

Those numbers don’t scream hypergrowth, but show resilience. In the fourth quarter, management described a challenging environment, including less money in Canadian markets. Yet the company still delivered solid annual earnings growth and continued to push its Next 100 initiatives, which focus on better merchandising, procurement, productivity, and long-term performance.

The dividend adds another reason to watch it. North West declared a quarterly dividend of $0.41 per share in April 2026. That works out to $1.64 annually, yielding about 3.2% at writing. That’s not a massive payout, but it looks more dependable than many higher-yield options.

Looking ahead

The balance sheet also helps the recession case. North West stock reported a debt-to-equity ratio of 0.38 at the end of fiscal 2025 and noted that this measure has stayed below one since 2000. That matters during tough markets because overleveraged companies often lose flexibility right when they need it most. North West stock doesn’t look stretched in the same way.

There are risks. Remote retail comes with high freight costs, weather disruptions, labour challenges, and exposure to government funding programs in some communities. The latest fourth quarter already showed pressure in Canadian operations from lower distributions tied to certain programs and settlement payments. Inflation can also hurt shoppers and margins at the same time. Investors shouldn’t assume this business can glide through every downturn untouched.

Another risk comes from growth. North West stock can improve stores, cut costs, and expand carefully, but it doesn’t operate like a high-speed retailer. Investors buying today should expect steadiness first, growth second. That trade-off can feel frustrating in a bull market, yet comforting when recession fears start moving through portfolios.

Bottom line

Yet altogether, that’s why I’d want it on a buy list before fear spreads further. North West stock offers essential retail exposure, a long operating history, a reasonable dividend, and a business model built around communities that need its stores. Even now, this is what $7,000 could earn investors.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTNWC$51.10136$1.64$223.04Quarterly$6,949.60

It won’t be the most exciting stock in a recovery. But if recession worries intensify, excitement may not be the priority. Dependability might be the better prize.

The post 1 Canadian Stock I’d Buy Before Recession Fears Spread Further appeared first on The Motley Fool Canada.

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