3 Bullet-Proof Stock Picks For Canadians

In investing, it's all about finding the right mix of stability and growth. I’ll highlight three Canadian stocks that offer both resilience and potential for solid returns. These companies have strong fundamentals and are well-positioned for future growth. If you're looking for reliable picks to add to your portfolio, these are worth a closer look.

Dollarama Inc. $DOL.TO

Dollarama is a standout among Canadian retailers, offering a blend of growth and reliability. With its extensive range of low-priced, fixed-cost products, it consistently attracts customers regardless of economic ups and downs. This approach provides a stable revenue base and supports steady growth.

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In the past five years, Dollarama’s stock has grown at an impressive CAGR of 23.3%. The company’s commitment to shareholder value is evident, having increased dividends 13 times since 2011.

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Looking ahead, Dollarama is on track to expand its store count to 2,000 by fiscal 2031, tapping into a broader customer base. Its direct sourcing and centralized logistics help maintain competitive pricing, even in tough markets.

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Recent earnings revealed an 8.6% rise in sales and a 20% increase in net earnings year-over-year, highlighting its resilience. The acquisition of a larger stake in Dollarcity in Latin America also boosts growth prospects. Coupled with regular dividend payouts, Dollarama remains a solid pick for long-term investors aiming for steady returns with a defensive edge.

Loblaw Companies Limited $L.TO

Loblaw Companies Limited, Canada’s biggest food and pharmacy chain, keeps proving its strength, even in tough times. Despite some noise about pricing, the company continues to deliver solid results.

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In the past five years, Loblaw’s stock has grown impressively, with a compound annual growth rate of over 20%. Its network of discount stores and wide product range keeps customers coming back, driving up same-store sales. In Q1 2024, retail sales increased by 4.4%, with same-store sales up 3.4%, showing strong consumer demand​​.

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Loblaw is committed to rewarding its shareholders, consistently boosting dividends. Their recent 15% increase marks the thirteenth consecutive year of growth. With strategies like price freezes and more private-label products, they’re well-positioned for continued success​​.

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Looking ahead, Loblaw’s plans to optimize its stores and expand online make it a solid choice for investors seeking stability and returns. Despite market challenges, this blue-chip stock remains a reliable option for Canadian investors.

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Celestica Inc. (CLS.TO)

Celestica Inc. has been on an impressive run, with its stock jumping over 320% in the last year. The company’s focus on high-growth areas like AI and electric vehicles has been a game-changer.

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In 2023, Celestica’s revenue climbed from $7.3 billion to $8 billion, with earnings up 68.1%​​. This growth comes from its strong performance in advanced technology and connectivity. The recent acquisition of NCS Global Services adds to its capabilities and has boosted investor confidence.

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Looking ahead, the demand for AI-driven solutions and smart energy should keep Celestica on a solid growth path. With its diverse customer base and strong product lineup, it’s a great pick for long-term investors​​.

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Even with some bumps in the EV market, Celestica's other business areas are expected to drive growth. Trading at a reasonable forward P/E of 17.7, it’s an attractive option for those seeking high growth and resilience.

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Sources:

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Dollarama: Information from the company’s website, recent press releases, and corporate presentations.

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Loblaw: Information from the company’s website, recent press releases, and corporate presentations.

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Celestica: Information from the company’s website, recent press releases, and corporate presentations.

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