Market downturns can stir up a lot of fear. When stock prices drop, and headlines grow gloomier by the day, it’s tempting to step back and wait for things to “settle.” But for long-term investors, that instinct might actually be backward. Market dips have historically been among the best times to invest, especially when TSX stocks in question are strong, profitable, and poised for future growth. Two such names on the TSX stand out right now. Those are Constellation Software (TSX:CSU) and GFL Environmental (TSX:GFL).
The idea of buying low and selling high is a classic for a reason. During downturns, investors often sell good companies out of fear or because of short-term news, pushing stock prices down. But history shows the market tends to bounce back. After the 2008 financial crisis, major indices like the S&P 500 and TSX Composite more than doubled over the next five years. Even more recently, during the pandemic crash in March 2020, global markets fell sharply, only to rebound within months. Those who held their positions or bought during the dip saw significant gains.
Consider Constellation
Constellation Software is a clear example of a company that not only survives tough markets but thrives through them. CSU acquires, builds, and grows vertical market software companies. These are specialized businesses serving niche industries like healthcare, education, and public safety. Because these markets are less competitive and often less sensitive to economic swings, the revenue Constellation earns tends to be stable, even during a downturn.
Its most recent results back that up. In the fourth quarter (Q4) of 2024, CSU posted revenue of US$2.7 billion, a 16% increase from the same period the year before. Net income jumped to US$285 million, more than doubling the US$139 million it earned in Q4 of 2023. For the full year, revenue hit US$10.1 billion, up 20% from 2023. Net income was also strong, reaching US$731 million, or US$34.48 per diluted share.
CSU continues to be acquisition-hungry, deploying nearly US$1.8 billion on new deals in 2024. That’s a key part of its business model. By snapping up smaller, profitable software firms and giving them the resources to grow, Constellation creates long-term value. It doesn’t rely on flashy innovation or hype — just solid, recurring revenue and disciplined management.
Get GFL
GFL Environmental, while in a very different industry, also shows signs of strength during tough times. As one of North America’s largest providers of environmental services, like solid waste management and soil remediation, GFL is in the business of things people need. Regardless of the economy. Garbage collection and environmental clean-up don’t stop just because markets are shaky.
In Q4 2024, GFL reported revenue of $1.99 billion, with 7% organic growth in its solid waste segment. The TSX stock grew pricing by 6% and volumes by 2.3%, showing strong demand across its operations. While it did report a net loss of $199.5 million in Q4, that was mainly due to non-cash charges. More importantly, the TSX stock grew its adjusted earnings before interest, taxes, depreciation, and amortization (EBTIDA) margin to 28.9%, up from 25% a year earlier. That signals a business becoming more efficient even as it scales up.
For the full year, GFL brought in $7.86 billion in revenue, excluding divestitures, representing 8.8% growth. Adjusted EBITDA climbed 12.3% to $2.25 billion, and adjusted free cash flow grew 17% to $820.3 million. GFL is also forecasting strong growth into 2025, with expectations for $8.4 to $8.5 billion in revenue and up to $2.5 billion in EBITDA.
Bottom line
So, should you invest now as the market dips? If you’re picking TSX stocks like Constellation and GFL, the answer might very well be yes. Both are operating in essential sectors, posting real revenue growth and showing the ability to scale through challenging periods. While short-term volatility is never fun, these are the types of TSX stocks that often lead the rebound when markets recover.
It’s worth remembering that timing the market perfectly is nearly impossible. However, consistently investing in high-quality businesses when prices are lower has long proven to be a winning strategy. Constellation Software and GFL Environmental aren’t just survivors — they’re builders. And in a downturn, that’s exactly the kind of TSX stock to own.