1.Canadian National Railway
CNR.TO (TSX)
Canadian National Railway stands out as a defensive investment in the railway sector, boasting a solid 2.62% dividend yield and an impressive 27-year streak of dividend payments. Despite experiencing a 1-year return of -4.82% and a 5-year return of -5.28%, analysts maintain a positive outlook, with Citigroup and CIBC giving it strong ratings of Buy and Outperform, respectively. For long-term investors, especially those who acquired shares below $130, CNR presents a stable option in a recession-resistant market characterized by consistent demand.
Pros:
- Stable demand in transportation sector
- 27-year dividend streak
- Market cap of $86.06B
Cons:
- Recent negative returns
- High competition in the rail industry
- Economic sensitivity
2.National Bank
NA.TO (TSX)
National Bank of Canada stands out as a preferred choice among Canadian banks, particularly due to its strong focus on Quebec and promising growth potential. With a solid 2.71% dividend yield and an impressive 1-year return of 30.94%, it remains a compelling option for investors seeking stability alongside growth. Analysts currently maintain a "Hold" rating, suggesting a cautious but optimistic outlook for this financially healthy institution.
Pros:
- Strong growth potential
- Low P/E ratio of 11.71
- Market cap of $67.71B
Cons:
- Economic downturn sensitivity
- High competition in banking sector
- Dependence on Quebec market
3.Fortis
FTS.TO (TSX)
Fortis Inc. stands out as a utility provider with a strong reputation, boasting a notable 3.50% dividend yield and a remarkable history of 50 years of dividend growth. Ideal for long-term investors, the stock has recently fallen into oversold territory, presenting a compelling buying opportunity amid short-term market fluctuations. Analysts maintain a cautious outlook, with RBC Capital rating it as Sector Perform and Credit Suisse offering a Neutral stance, indicating a stable yet cautious sentiment in the market.
Pros:
- 50-year dividend growth history
- Stable demand in utility sector
- Market cap of $36.01B
Cons:
- Market volatility risk
- Lower yield compared to some other dividend stocks
- Dependence on regulatory environment
4.Loblaws
L (TSX)
Loblaws stands out as a resilient essential grocery and pharmacy retailer, including brands like Real Canadian Superstore and Shoppers Drug Mart, which tend to maintain demand even during economic downturns. With an impressive 1-year return of 38.4% and a striking 5-year return of 291.7%, it offers a dividend yield of 1.52% for income-focused investors. Analysts have given it a solid B+ rating, indicating confidence in its stability and growth potential.
Pros:
- Essential grocery and pharmacy retailer
- Strong demand during economic downturns
- Market cap of $74.11B
Cons:
- Dependence on consumer spending
- Competition in grocery sector
- Potential supply chain issues
5.Alimentation Couche-Tard
ATD.TO (TSX)
Alimentation Couche-Tard stands out as a reliable convenience store operator, boasting a 1.09% dividend yield and a solid track record of defensive qualities over the past 13 years. While the stock has experienced a slight decline of 0.05% over the past year, it has impressively gained 81.89% over the last five years, indicating resilience and growth potential. Analysts have a positive outlook, with a target price of C$85.00, suggesting a possible upside of around 14.74% from its current level.
Pros:
- Steady consumer traffic
- 13-year dividend streak
- Market cap of $71.14B
Cons:
- Low current dividend yield
- Economic sensitivity
- Competition in retail sector
Final Words
As you consider the best recession-proof stocks in Canada this January 2026, focus on reliable options like Fortis that offer stability and consistent dividends. Take time to compare different investment opportunities and conduct your own research to make informed decisions that align with your financial goals.
Frequently Asked Questions
Fortis is considered a strong investment due to its stable utility services and a notable 50-year history of dividend growth. With a current dividend yield of 3.50%, it offers consistent returns, making it appealing during uncertain economic times.
As of January 2026, Fortis has shown a 1-year return of 21.60%, a 5-year return of 39.22%, and an impressive 10-year return of 88.97%. These figures indicate solid long-term performance, making it a favorable option for investors.
Fortis pays dividends quarterly, with the next dividend scheduled at $0.6400 on March 1, 2026. This regular income stream is attractive to income-focused investors.
Fortis has a market capitalization of $36.01 billion, reflecting its significant presence in the utility sector. This large market cap often indicates stability and reliability in financial performance.
Recession-proof stocks typically belong to sectors that provide essential services, such as utilities, healthcare, and consumer staples. These companies often maintain stable revenues and dividends even during economic downturns, making them a safer choice for investors.
When comparing utility stocks, consider factors such as dividend yield, historical performance, market capitalization, and growth potential. Additionally, examining the company's service area and regulatory environment can provide insights into its stability and profitability.
