Canadian buyers trying to protect their portfolios from volatility as commerce tensions between the U.S. and Canada escalate might discover solace in proudly owning three defensive shares proper now. Defensive shares, these anchored in resilient sectors like retail actual property, utilities, and client staples, supply a lifeline, combining stability with dependable dividends. These resilient low-volatility shares thrive on home demand, insulating them from cross-border disruptions. Let’s discover three important sectors and spotlight standout candidates in every class. Whether or not you’re looking for regular earnings or capital preservation, these commerce struggle shares might fortify your portfolio in opposition to financial storms.
Dollarama inventory: Discounting tariff dangers
Low cost shops operator Dollarama (TSX:DOL), although not a standard grocer, dominates the worth section with 90% of gross sales from common merchandise, consumables like snacks, and family staples principally priced below $5. Its pricing energy and near 1,600-store footprint in Canada guarantee regular demand, at the same time as budgets tighten.
Dollarama is a budget-friendly necessities supplier that may cushion Canadian households if commerce wars set off a recession. Its inventory has soared 23% year-to-date to print new all-time highs in 2025, defending investor portfolios from tariff-war-induced volatility.
DOL inventory is a darling of the TSX inventory market proper now. The Canadian defensive inventory might present shelter to customers if tariff wars set off a recession within the close to time period. The low cost retailer large additionally owns a big stake in South America’s Dollarcity.
That stated, buyers pays a major premium to get Dollarama inventory’s commerce struggle insurance coverage cowl. Buying and selling at a historic price-earnings a number of (P/E) of 41.5, DOL inventory isn’t low-cost. However different defensive shares from the identical business aren’t low-cost both, given an business P/E of 37.
SmartCentres REIT: Important retail actual property for regular returns
Canadian retail actual property funding trusts (REITs) with open-air strip centre codecs loved sturdy, sustained occupancy charges in the course of the pandemic. They may survive a commerce struggle too.
SmartCentres Actual Property Funding Belief (TSX:SRU.UN) is a resilient retail REIT that sustained month-to-month distributions in the course of the previous flash recession. Its sturdy tenant base (principally grocery shops and important companies suppliers) stays resilient, and the REIT reported a robust 98.7% occupancy charge going into 2025.
The Canadian retail REIT is executing a multi-year mixed-use property improvement technique that’s bringing extra client populations onto its 195 current properties, creating new metropolis centres which will thrive and enrich unitholders. The REIT’s improvement pipeline might develop its asset base by 14% because it provides condos, flats, townhomes, and self-storage areas onto its properties, intensifying foot visitors in its “good” centres.
The belief pays month-to-month distributions that yield a juicy 7.3%. The payout remained absolutely coated by recurring money movement in 2024 with a 91.7% payout charge on adjusted funds from operations (AFFO), which improved from 93% in 2023.
Traders might pocket high-yield month-to-month paycheques from SmartCentres REIT whereas watching a commerce struggle play out.
Hydro One: A utility inventory powering portfolios via uncertainty
Canadian utilities’ earnings visibility and low money movement volatility make them a marvel during times of heightened financial uncertainty. Traders assured in Ontario’s sustained demand for secure electrical energy provide even via recessions might discover consolation in proudly owning the province’s largest energy distributor: Hydro One (TSX:H) inventory via a commerce struggle.
Hydro One operates Ontario’s largest transmission and distribution community and stays a important provincial monopoly considerably insulated from commerce dangers. The electrical utility is reinvesting money movement and partnering with fairness companions to develop its asset guide and charge base in 2025.
With a 2.4% dividend yield and 7 consecutive years of dividend raises, buyers might view Hydro One inventory as a financially secure utility with investor-friendly capital budgeting insurance policies and a defensive inventory to carry expensive throughout an unsure commerce struggle.
Investor takeaway
In turbulent occasions, anchoring your long-term oriented portfolio in sectors pushed by home requirements can present peace of thoughts. These three defensive shares to purchase now supply a mix of yield, stability, and resilience – qualities each investor ought to prioritize as commerce winds rage.
