- The TSX main equity index has been in the red after since the latest rate hike
- Loblaw (TSX: L) stocks galloped by roughly 54 per cent year-over-year
- Hydro One (TSX: H) stocks grew by over 16 per cent in nine months
The TSX main equity index has been in the red after the Bank of Canada (BoC) raised its benchmark interest rate to 2.5 per cent on Wednesday, July 13. Keeping in mind the possibility of an economic recession, new investors seeking balanced risk-reward in the long horizon could explore quality TSX stocks like BCE (TSX: BCE), Canadian National (TSX: CNR), Dollarama (TSX: DOL), Enbridge (TSX: ENB), etc.
So, without further delay, let us discuss nine such TSX stocks.
1. BCE Inc (TSX: BCE)
The telecommunication sector is one of the defensive sectors that could protect new investors against volatility risk in the long run. Hence, BCE, one of Canada's top communication service providers, could be considered amid the ongoing market environment.
The C$ 58-billion market cap company is advancing 5G internet technology and expanding its network infrastructure. BCE stock swelled by roughly three per cent year-over-year (YoY). Refinitiv findings indicate that BCE stock held a Relative Strength Index (RSI) value of 46.56 with increasing trading volume on July 14, indicating a near moderate trend.
1. Loblaw Companies Limited (TSX: L)
Loblaw is one of Canada's largest retailers with grocery, pharmacy and general merchandise businesses. Loblaw announced that its banner Joe Fresh with its partner Sasha Exeter launched a summer sports capsule collection earlier this month.
L stock galloped by roughly 54 per cent in 12 months and appears to be on an uptrend with an RSI of 60.08 on July 14.
2. Canadian National Railway Company (TSX: CNR)
Canadian National recently in June announced plans to invest millions in enabling sustainable growth and improving its railroad network. The Canadian rail transportation company recorded a return on equity (ROE) of almost 24 per cent, representing profitability measured by dividing its net profit by shareholders' equity.
CNR include low financial risk as its debt-to-equity (D/E) was 0.63 (lower than one). CNR stock climbed roughly 11 per cent in 12 months. As per Refinitiv findings, CNR's RSI was 56.68 (moderate level) on July 14.
3. Enbridge Inc (TSX: ENB)
Enbridge, a midstream energy supplier, is among dividend aristocrats in Canada. The pipeline infrastructure company recorded a dividend yield of over six per cent (annual dividend payout by the firm denoted shown as a percentage of its current stock price).
EMB stocks were up by almost nine per cent in a year. As per Refinitiv, ENB stock held an RSI of 39.85 on July 14.
©Kalkine Media®; ©Garis Studio via Canva.com
5. Dollarama Inc (TSX: DOL)
Dollarama is another consumer defensive stock that investors could consider. The discount retail stores owner have a market capitalization exceeding C$ 22 billion.
Dollarama is set for a quarterly dividend payment of C$ 0.055, due on August 5. DOL stock jumped by about 21 per cent year-to-date (YTD). According to Refinitiv, DOL stock had an RSI of 57.71 on July 14, with volume in the green territory, denoting a moderate trend.
6. Royal Bank of Canada (TSX: RY)
Royal Bank saw its stock clock a new 52-week high of C$ 119.20 on July 14. RY stock slumped by over seven per cent in 52 weeks and, according to Refinitiv, appears on a bearish trend with an RSI value of 29.31 (in the oversold territory) on July 14.
However, when considering a long-term approach, investors could consider this bank stock available at discounted prices as it is among the top five banks, with a huge market capitalization (C$ 167.18 billion).
7. Open Text Corporation (TSX: OTEX)
Open Text is a C$ 13-billion market cap company that could be an option for long-term investors looking to invest in the technology sector. The software company disburse dividends (US$ 0.221) every quarter.
OTEX stock declined by over 22 per cent and, according to Refinitiv data, held an RSI of 46.46 and noted a positive trading volume on July 14.
8. Hydro One Limited (TSX: H)
Low-risk investors generally prefer utility stocks as they offer necessary products and services like power production and transmission, which are defensive in nature. Hence, these companies could provide stability amid economic uncertainties.
Hydro One reported total revenues of C$ 2.04 billion in Q1 2022, relatively high from C$ 1.81 million in Q1 2021. H stock grew by over 16 per cent in the past nine months. According to Refinitiv, Hydro stocks held an RSI of 66.35 on July 14.
9. Emera Incorporated (TSX: EMA)
Emera is a C$ 16-billion market cap utility company engaged in electricity production, distribution and transmission in North America and Caribbean nations.
EMA scrip shot up by approximately eight per cent in a year and, as per Refinitiv findings, recorded an RSI of 61.29, supported by increased trading volume, on July 14.
Though the current market dynamics are volatile due to mounting fear of an economic recession, new investors could explore these healthy TSX stocks to begin their investment journey. Additionally, these stocks distribute sturdy dividends, which can expand investors' portfolio income.
Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.