Defensive Stocks Every Canadian Investor Needs During Market Volatility

Canada is blessed with an abundance of defensive stocks that provide both growth and income potential, even during market volatility.

Defensive stocks are those that provide products or services that continue to generate stable revenue even during times of volatility.

Here are three stellar options for investors seeking defensive stocks to consider buying today.

Option 1: Waste Connections

Waste Connections (TSX:WCN) is one of the largest waste management companies in North America. The company offers garbage collection and recycling services in the residential, commercial, and industrial sectors.

Garbage collection is a necessity that still gets collected irrespective of how the market fares. This makes Waste Connections one of the defensive stocks for investors to consider.

Even better is that the defensive revenue that Waste Connections generates is stable and growing. That comes thanks to the long-term contracts the company has with both municipalities and businesses in markets across North America. Not only does this provide an element of diversification, but it also provides a predictable revenue stream.

That predictable revenue stream allows Waste Connections to invest in both share buybacks and its small, yet growing dividend.

As of the time of writing, that dividend works out to a 0.83% yield and boasts over a decade of annual increases to that dividend.

Option 2: Wheaton Precious Metals

Another one of the defensive stocks for investors to consider now is Wheaton Precious Metals (TSX:WPM). Wheaton is a precious metals streamer, which is quite different from a traditional miner.

Streamers don’t operate the mines the same way that traditional miners do. Instead, Streamers provide upfront capital to traditional miners who begin mining operations.

In exchange for that initial injection of capital, streamers can purchase precious metals produced from the mine at a hefty discount. The streamer can then choose to sell those metals at market rates or hold them for later.

This means that streamers can quickly move on to the next investment opportunity, leaving the day-to-day expenses to the traditional miner. It also makes the streamer a significantly lower-risk investment.

Wheaton also offers investors a quarterly dividend, which currently offers a 0.57% yield.

As one of the defensive stocks for your portfolio, Wheaton excels. When volatility hits the market, investors often turn to safe-haven assets like precious metals. By extension, this helps push Wheaton’s valuation higher.

Option 3: Fortis

One final option for investors who are seeking defensive stocks is Fortis (TSX:FTS). Fortis is a regulated electric and gas distribution utility stock. The company has operations across the U.S., Canada, and the Caribbean.

The sheer necessity of the service that a utility like Fortis provides makes it one of the most defensive stocks on the market. Those assets are regulated, generating reliable and recurring revenue streams that leave room for additional growth investments.

Throw in the geographic diversity of Fortis and its stellar dividend, and you have an investment that is too hard to ignore.

As of the time of writing, Fortis offers a quarterly dividend with a yield of 3.6%. Adding to that appeal is the fact that Fortis has provided annual upticks to that dividend for 52 consecutive years without fail.

Defensive stocks for Canadian investors

For any investor assembling a portfolio of defensive stocks, a core of Wheaton, Waste Connections, and Fortis can play different roles.

Waste Connections offers exposure to essential waste services sourced by contract-driven cash flows. Fortis brings regulated utility stability and a long-term dividend. Finally, Wheaton adds the safe-haven appeal of precious metals.

Together, they span multiple segments, offer reliable income generation, and should be part of any well-diversified portfolio.

The post Defensive Stocks Every Canadian Investor Needs During Market Volatility appeared first on The Motley Fool Canada.

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More reading

• 1 Oversold TSX Stock That’s So Cheap, it’s Ridiculous
• 2 Canadian Stocks to Buy and Hold for Life in a TFSA
• TFSA: 2 TSX Stocks for Your $7,000 Contribution
• 2 Dividend Stocks to Double Up on Right Now
• TFSA: 3 Top TSX Stocks for Your $7,000 Contribution

Fool contributor Demetris Afxentiou has positions in Fortis. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.