The TSX Stocks I’d Use to Anchor a More Defensive 2026 Portfolio

2026 has been one of the most volatile years in the stock market that I can remember. Since COVID-19, there have been plenty of ups and downs. But there have just been a plethora of factors to contemplate in 2026. It’s not easy knowing how to invest in this environment.

Flock to steady TSX stocks when the market turns volatile

Fortunately, there are some faithful stocks that deliver solid, steady results year in and year out. When the market turns volatile, these stocks tend to outperform.

You might have to pay a premium to hold these stocks right now. However, if you just want steady returns and the ability to sleep well at night, these two defensive stocks are worth looking at today.

Loblaw: A quiet TSX star

With a market cap of $71.5 billion, Loblaw Companies (TSX:L) is the largest grocery and pharmacy provider in Canada. If food inflation is a concern, why not buy a company that could benefit from it?

It could help you offset the losses from inflation. Loblaw stock is up 250% in the past five years. With this stock, you would have beaten inflation and then significantly more!

While the company is only growing revenues by a mid-single-digit rate, earnings per share (EPS) have risen by a 23% compounded rate. Share buybacks have been a good part of this return. Since 2021, it has bought back around 3.5% of its shares every year.

Loblaw is a well-managed business. Its scale, pricing power, top loyalty program, and diversification across brands and regions differentiate it as an essential goods leader in Canada.

Today, its valuation is elevated. It trades with a price-to-earnings (P/E) ratio of 24, which is above its 10-year average of 17. It is arguably a much better business than 10 years ago. However, investors need to be cognizant that they aren’t likely to fetch additional gains from its valuation increasing further in the years ahead.

Waste Connection: A TSX stock that is down but not out

Waste Connections (TSX:WCN) is another defensive stock to hold through the volatility. It has a market cap of $56 billion. However, its recent performance has been less than spectacular. This TSX stock is down 9% this year.

Yet, garbage and waste removal are essential services for consumers and businesses. You only need to forget your garbage day once to realize how important waste disposal is.

Waste Connection has a long history of delivering solid shareholder value. Its stock has compounded at a 13.8% annual rate over the past 10 years. In the past five years, it has grown revenues by an 11.7% compounded annual rate, and EPS have risen by a 39% compounded annual rate. It has a history of making smart acquisitions and delivering steady organic growth.

An environmental issue at a landfill in California has been a costly drag on results in the past two years. Once that is sorted, this stock could return to its history of solid compounded growth. After the recent pullback, this stock is trading near its lowest P/E ratio in the past five years. The pullback could present a nice opportunity to add this low-volatility stock to your portfolio.

The post The TSX Stocks I’d Use to Anchor a More Defensive 2026 Portfolio appeared first on The Motley Fool Canada.

Should you invest $1,000 in Loblaw Companies Limited right now?

Before you buy stock in Loblaw Companies Limited, consider this:

The Motley Fool Canada team has identified what they believe are the top 10 TSX stocks for 2026… and Loblaw Companies Limited wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have over $16,000!*

Now, it’s worth noting Stock Advisor Canada’s total average return is 87%* – a market-crushing outperformance compared to 76%* for the S&P/TSX Composite Index. Don’t miss out on our top 10 stocks, available when you join our mailing list!

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* Returns as of March 24th, 2026

More reading

• Canadian Defensive Stocks to Buy Now for Stability
• This Canadian Stock Is Down 20% and Nearly Perfect for Long-Term Investors
• The Safer Dividend Stocks I’d Consider If I Had $20,000 to Put to Work
• 3 Stocks That Canadian Investors Can Feel Good About Buying in Any Market
• Maximizing Returns: How to Best Use Your TFSA in 2026

Fool contributor Robin Brown has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Waste Connections. The Motley Fool has a disclosure policy.