U.S. President Donald Trump has been focused on using tariffs to help generate revenue and improve conditions for the U.S. economy. And that’s bad news for a lot of Canadian companies which do business in the U.S. That can result in worsening sales and profit numbers, and tanking share prices as well. For investors, it can make investing in Canadian stocks risky.
One stock, however, which may potentially be among the safer ones to own on the TSX is grocery giant Loblaw (TSX:L). The Canadian-based retailer does have a small presence in the U.S. but its focus is mainly on Canada. And the advantage it has is that it’s in a better position to source products locally and get around tariffs (should Canada impose its own) than other companies, who may be more reliant on the U.S. And if worst comes to worst, it can raise prices and that isn’t likely to cripple its business, since groceries are essentials and any challenges Loblaw faces, other grocers likely will as well.
This is why Loblaw can be a fairly good, safe buy to hang on to. In the past three months (since Trump won the election), the stock is up a fairly modest 2%, as investors don’t appear to be hitting the panic button on the stock despite the seemingly bad news for the Canadian economy with respect to tariffs.
Loblaw is an extremely low-volatility stock with a beta of less than 0.2. And it also pays a dividend which yield 1.1%. For buy-and-hold investors, this can be a solid stock to park your money in if you’re not sure what to invest in today.
