Periods of heightened market volatility, like what we’re seeing now, often present compelling opportunities for long-term investors. While caution is necessary in this environment, sitting on the sidelines entirely could mean missing out on stocks to buy now at attractive valuations. Savvy investors know that uncertainty can create some of the best buying opportunities.
Market fluctuations and uncertainty aren’t uncommon, especially given the challenges of recent years – from the pandemic to soaring inflation and aggressive interest rate hikes.
However, the ongoing trade war, with new developments emerging almost daily, has added another layer of unpredictability. Investors are left grappling not only with which companies will be most affected but also with the potential ripple effects on Canada’s broader economy.
That’s why two of my favourite stocks to buy now are high-quality and reliable defensive stocks that still have long-term growth potential.
So, if you’re looking to put some cash to work, especially with the prospect of higher inflation on the horizon due to the trade war and tariffs, here are two top stocks to buy today.
Defensive growth stocks are some of the best stocks to buy now
There’s no question that Dollarama (TSX:DOL) has been one of the best-performing stocks on the TSX for years. However, when you look at its business model it quickly becomes apparent why Dollarama continues to have so much growth potential.
As a discount retailer, Dollarama is one of the few Canadian stocks that can continue growing in any economic environment. However, it arguably has even more growth potential when the economy is struggling.
That’s because the worse the economy gets, the more consumers turn to discount retailers like Dollarama to stretch their budgets and save money on household staples and other essential goods.
On top of that, Dollarama isn’t just any discount retailer, it’s the largest and most well-known discount retailer in Canada. Therefore, its impressive business model, combined with its consistent execution, makes it one of the best stocks to buy now.
Over the last five years, Dollarama’s revenue has grown by at least 6.3% annually. But its two strongest years – when growth surged to over 16% – came in 2022 and 2023, right as inflation was skyrocketing and many Canadians were feeling the squeeze.
It’s still too early to know just how much tariffs and a potential trade war could impact the Canadian economy. But with many Canadians already worried about their financial futures and adjusting their spending habits, Dollarama has a tonne of potential to see another significant increase in sales and profitability. That’s why it’s one of the best stocks to buy now.
Of course, because of its strong reputation as both a growth stock and a defensive business, Dollarama isn’t cheap. But if you’re planning to buy and hold for the long term, paying a small premium for a high-quality stock like Dollarama is worth it, especially since it rarely trades at a discount anyway.
In addition to a reliable stock like Dollarama, another excellent stock to buy now is Telus (TSX:T), the $32 billion telecom stock.
Telus is one of the best stocks to buy in this environment due to its reliable earnings, long-term growth potential and significant dividend yield.
As one of the largest telecom stocks in Canada, the services it provides its customers are essential and therefore much of its revenue is stable and recurring, making it a reliable investment even in uncertain economic conditions.
In addition to offering essential services and generating reliable revenue, Telus owns long-life assets that help it produce significant cash flow. Furthermore, much of that cash flow is returned to investors through its dividend.
That’s especially important because if tariffs and the trade war last longer than expected, the stock market could continue to decline or, at best, move sideways for an extended period.
Therefore, with limited opportunities for capital gains, Telus’s current dividend yield, which sits at over 7.4%, becomes even more attractive for investors.
So, if you’ve got cash that you’re looking to invest today, Telus is undoubtedly one of the best stocks to buy now.