Five recession-resistant Canadian stocks to watch in 2023

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Stock investors are in for a bumpy ride in 2023. These five companies are recession-resistant, or defensive stocks, that hold up better than most in uncertain times.

The first half of the year could see stocks drop further in a bear market that began in 2022, due to a recessionary weakening in corporate profits. But the outlook for the second half of 2023 is brighter, as inflation and interest rate hikes ease and earnings per share strengthen. And the coming year should see early signs of a return to equities, starting with blue chips. Investor sentiment has already shifted away from speculative high-risk stocks, real estate and cryptocurrencies.

And HSBC Canada’s $134 billion in assets, which add about seven per cent to RBC’s total assets, give RBC a bigger home market with which to finance offshore expansion.A key to the deal is HSBC Holdings’ agreement to refer its own customers who are moving to Canada to RBC. In a slow-growth Canadian market, RBC is determined to win clients among the approximately 500,000 immigrants Canada is expected to receive each year until 2025.

The firm’s expansion into residential properties in the mid-2010s to guard against the rise of e-commerce helped reduce RioCan’s exposure to retail during the COVID-19 lockdowns. RioCan’s landmark mixed-use development underway in Toronto, The Well, doesn’t signal a change in strategy. RioCan is continuing to add residential and office at some of its properties. But it will remain anchored in the retail sector, where it has long been a dominant player.

But the higher immigration levels that Telus credits with building its client base this year will continue to 2025. During that time, Canada is expected to welcome about 1.5 million New Canadians. Telus stands to benefit across Canada, and especially from its core service region of B.C. and Alberta, highly favoured by New Canadians.

Based on those record quarterly results, BRP boosted its full fiscal 2023 guidance in November to a revenue increase of between 27 and 32 per cent over 2022’s $1.6 billion. Now trading at about $106, BRP shares have recovered fully from their nadir earlier in 2022. But the stock is reasonably priced, with a price-earnings multiple of just 12.The current economic malaise has hit retailers especially hard. But while Canadian Tire is no exception, its performance has held up better than most publicly traded North American merchants.

 

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