So who knew!? Defensive stocks were purchased last year to protect against a potential market downturn, but the train kept chugging up the hill in our low-interest-rate environment and the equity market benefited.
These are 5 Defensive Canadian Stocks I purchased in 2021, and I still own all of them. In fact, I own a fair amount more share of these picks now too!
The purpose at the time of purchase for these Canadian stocks was to offer some reasonable upside potential and dividend growth, while (hopefully) offering some downside protection in case we saw another big market collapse like March of 2020.
Well, that didn’t happen, but these picks still all performed extremely well, particularly the last one on the list. So be sure to check out the full recap a year later and how my investment choices turned out.
As of market close on TUESDAY FEBRUARY 8, 2022
(Original prices as of February 15th, 2021)
(approximate returns not including dividends)
Canadian National Railway
THEN: CNR.TO (SP/$140.49 – Yield 1.757%)
NOW: CNR.TO (SP/$155.91 – Yield 1.88%) (Dividend Raise)
RETURN: +$15.42/share (+10.9%)
Canadian National Railway saw some big ups and downs over the past year. Their push to purchase (or outbid CP Rail for) Kansas City Southern rail lines in the US (KSU.N) pushed the stock as high as $167 in October of last year. It’s since come back down, but will likely continue its slow and steady growth for years to come.
Alimentation Couche-Tard
THEN: ATD-B.TO (SP/$39.82 – Yield 0.88%)
NOW: ATD-B.TO (SP/$54.26 – Yield 0.81%) (Dividend Raise)
RETURN: +$14.44/share (+36.3%)
Alimentation Couche-Tard also has had a bit of a see-saw ride the past year with investors torn over potential future ‘growth by acquisition’ plans. The stock has still done extremely well, perhaps surprising given the overall environment of the pandemic and fewer people potentially travelling and hitting up gas stations and convenience stores. However, one would think the recent surge in oil prices will help boost revenue at the pumps for Couche-Tard.
Fortis
THEN: FTS.TO (SP/$51.50 – Yield 3.92%)
NOW: FTS.TO (SP/$59.78 – Yield 3.58%) (Dividend Raise)
RETURN: +$8.28/share (+16.1%)
Fortis is slow and steady, nothing too exciting to report and much to be expected from a large utility stock. With a 16% return, there is nothing to complain about and honestly, I don’t really even give much thought to this rock-solid and well-known business, besides when the quarterly dividends roll in, which keep increasing every year. Fortis now has a streak of 47 consecutive years of growing the dividend.
Telus
THEN: T.TO (SP/$26.68 – Yield 4.67%)
NOW: T.TO (SP/$30.66 – Yield 4.27%) (Dividend Raise)
RETURN: +$3.98/share (+14.9%)
Telus has kind of run sideways for most of the year, but then slowly crept back up in the past month or two and have shown strong earnings and growth. It’s hard to go wrong with any of the three major telecom providers (Rogers / BCE / Telus) as the trio dominates the market in Canada. All three companies have similar profiles, dividend payouts and wide competitive moats.
Loblaw Companies
THEN: L.TO (SP/$62.58 – Yield 4.67%)
NOW: L.TO (SP/$101.44 – Yield 1.44%) (Dividend Raise)
RETURN: +$38.86/share (+62.1%)
Loblaws was a bit of a play on COVID-19 and the assumption that people would be purchasing more groceries and eating out less. Who knew that amidst this environment Lobloaws stock would almost double! All have done reasonably well during the pandemic, but I had taken a look at George Weston Ltd ($WN), Metro ($MRU) and Empire Company $EMP.A, before settling on purchasing Loblaws last year. I am still happy to hold it, given the myriad of business segments within the Loblaws brand and stores.
Check out some of my past picks in the article “5 Beaten Down Canadian Dividend Stocks to Consider“
What are your favourite stocks to buy in 2021? Let me know in the comments section below!
Note: Prices & Yields are approximate as of February 8, 2022, and may be used for comparison purposes at a future date.
Disclosure – At the time of writing this article, I am/we are long CNR.TO, ATD-B.TO, T.TO, L.TO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it and have no business relationship with any company whose stock is mentioned in this article.
Disclaimer: Speak with a professional advisor before investing or do your own research. This website is for discussion and informational purposes only. These are my opinions, do not base your investment decisions on material found on this website.
