Given the truth that we’re about to show the web page to a New Yr, traders could also be rethinking how strong their portfolios are and whether or not they can face up to any form of main market headwinds over the course of the following 12 months.
In fact, predicting simply what kind of bullish catalysts or bearish headwinds might come up over the following 12 months is sort of not possible. Exterior of AI (and the bull/bear case round this pivotal expertise), there actually aren’t many areas the place predictions will probably be useful. For instance, I do not know the place rates of interest, commodity costs, and different key inputs will finish subsequent 12 months.
With that stated, given the present underlying dynamics out there, listed below are two shares I believe might have a giant 12 months subsequent 12 months whatever the macro backdrop, and one I consider will not be well-positioned to deal with no matter is forward.
Purchase: Fortis
One of many prime dividend development shares out there and an organization I believe can proceed to ship development in 2026 and for many years to return, Fortis (TSX:FTS) is amongst my most defensive inventory picks for the approaching 12 months, for traders with a long-term investing time horizon.
That’s primarily as a consequence of the truth that, as a key regulated utilities supplier of electrical energy and pure gasoline to thousands and thousands of residential and business clients, Fortis’ enterprise mannequin actually is acyclical. In different phrases, it doesn’t matter what occurs with the broader economic system, the AI buildout is underway, and current clients can have no alternative however to pay their Fortis payments to maintain the lights and warmth on. That money movement stability and potential for dividend development are what have stored Fortis’ dividend yield comparatively low at simply 3.6%.
That stated, I believe the corporate’s long-term capital appreciation upside ought to make for prime single-digit or low double-digit annual returns. In a probably unstable 12 months, that’s adequate for me.
Purchase: Manulife
Few sectors are as defensive as life insurance coverage, and on this sector, Manulife (TSX:MFC) is among the many finest choices for Canadian traders searching for upside proper now.
The corporate’s core life insurance coverage enterprise has remained stable, and Manulife has posted more and more sturdy leads to current quarters, supported by greater yields on longer-duration belongings. Like different insurers, Manulife must match up its longer-duration liabilities with belongings that pay out over longer durations of time (akin to bonds), so decrease yields, and even expectations of decrease long-term yields, have boosted the corporate’s outlook on this regard.
On prime of this underlying energy, the corporate’s wealth administration enterprise can be surging. That’s come principally as a result of firm’s development technique in Asia, and that’s key to my long-term thesis on this title.
With an 18% year-to-date return in its shares and a 3.5% yield, traders have pulled in additional than a 20% whole return this 12 months. Whereas 2026 might not result in such rosy numbers, it might nonetheless be a really worthwhile 12 months for traders on this title in my opinion.
Promote: Lightspeed Commerce
One Canadian development inventory I’ve change into extra bearish on of late is Lightspeed Commerce (TSX:LSPD).
Shares of the Canadian tech inventory have been completely decimated lately, as its rollout of point-of-sale software program and quite a few strategic shifts haven’t paid off.
I beforehand mentioned this inventory as very overvalued throughout the 2021 growth, which noticed shares surge to greater than $150. Now buying and selling round $16.50 and down 25% because the starting of the 12 months, this can be a inventory I don’t assume traders wish to step in entrance of, significantly if valuations within the tech sector proceed to return down.
Sooner or later, I believe Lightspeed might have to lift extra capital to remain afloat, and it’s not rising like traders clearly had hoped. That is one Canadian tech inventory I wouldn’t personally contact with a 10-foot pole, however that’s simply me.
