3 Canadian Stocks That Could Outperform if Growth Stays Soft

Canada’s gross domestic product (GDP) recorded a 0.1% decline in the first quarter of 2026. This followed a fourth quarter decline of 0.2%, and it has some of us worried. How do we invest if growth remains weak? What are the best Canadian stocks to buy that are likely to outperform if this is the case?

Let’s look into this.

The Canadian GDP number – the pros and cons

Weak GDP numbers have been the result of low business investment and weak exports. U.S. trade uncertainty is certainly to blame, as is the general perception of an increasingly risky macro-economic environment.

On the pro side, personal consumption held strong and inflation remained under control. Also, the OECD is expecting GDP growth to strengthen over 2026 and 2027. This is expected as the economy recovers from trade-related tensions and as the government increases spending on defence and infrastructure.

This being said, I think it’s prudent to fortify one’s portfolio, ensuring it’s protected should the economy head south.

Cineplex

My first recommendation is Cineplex Inc. (TSX:CGX), Canada’s premier movie exhibition and gaming company. Cineplex has a dominant market share (80%+) in the movie exhibition industry, which is an industry that has proven to be resilient in times of recession. And this industry has been recovering.

Should the economy remain weak, I think that Cineplex stock will be an outperformer. During recessionary times, movie-watchers have continued to spend on this comparatively cheap form of entertainment for a much-needed escape.

Yet, Cineplex stock continues to trade at depressed levels of 18 times next year’s earnings estimate. This valuation does not give the company credit for the underlying resilience of its business. A business that’s showing signs of recovery even as Canadian GDP numbers are weak. For example, box office revenues of $60.5 million in May was the highest since 2019 and 9.4% higher than last year.

Theatrical windows are increasing, debt is falling, and Cineplex stock looks set to move higher even in a soft economy.

Enbridge

As one of North America’s top energy infrastructure companies, Enbridge Inc. (TSX:ENB) is a stock that I expect will also outperform in the event that the economy remains soft.

Enbridge stock is currently enjoying record energy demand. With revenue that’s split between its utility segment and its midstream infrastructure, Enbridge has amassed a revenue stream that’s largely regulated and/or under long-term contracts. This means that it’s pretty safe and predictable, with little downside risk.

Today, Enbridge stock is yielding a very generous 4.9% despite the company’s stable and defensive business. In my view, there’s a disconnect between Enbridge stock’s fundamentals and its valuation – and this disconnect will not last. The company’s predictable cash flows are deserving of a much higher valuation.

Well Health Technologies

The last Canadian stock that should outperform if growth stays soft is Well Health Technologies Corp. (TSX:WELL). Well Health is an omnichannel digital healthcare provider, with primary care clinics, diagnostics clinics, and specialty clinics under its umbrella.

Well Health is expanding its Canadian primary care clinics at a rapid pace, and the opportunity is still large in this highly fragmented market. The company’s value proposition for doctors is clear. Well Health’s technology improves efficiencies, increases margins, frees up time for doctors to concentrate more on patient care, and it improves patient care. Last quarter, Well Health’s revenue increased 25%, and its adjusted net income doubled.

This is a business that’s pretty insulated from and independent of the economy as healthcare is an essential industry. But regardless of this, Well Health stock is attractive under any scenario, as the company is having a positive impact financially and operationally, as well as on the quality of care that patients receive.

The bottom line

Some of the best Canadian stocks to own in a weak economy are outlined in this article. These are stocks that I expect will be resilient even if the Canadian economy remains weak as their businesses are relatively defensive and immune to economic happenings.

The post 3 Canadian Stocks That Could Outperform if Growth Stays Soft appeared first on The Motley Fool Canada.

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More reading

• 3 Canadian Blue-Chip Stocks to Hold Through 2026 and Beyond
• 2 Canadian Dividend Stocks Perfect for Retirees
• 4 Dividend Stocks I’d Happily Double My Position in Today
• 2 Canadian Dividends Stocks Worth Snapping Up on Any Dips
• 1 Dividend Giant I’d Buy and Never Sell

Fool contributor Karen Thomas has positions in Cineplex, Enbridge, and Well Health Technologies. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.