Americore Resources (TSXV: AMCO)
Drilling Value in the Silver State
As geopolitical tensions escalate and commodity prices swing wildly, the Canadian stock market is on a rollercoaster ride. News of Iran potentially blocking the Strait of Hormuz—a chokepoint for 20% of the world’s oil—has sent energy stocks soaring. At the same time, concerns over inflation and slowing economic growth are driving a rush into defensive sectors. For Canadian investors, this creates a familiar dilemma: Should you flee entirely to the safety of utilities, or double down on resource stocks to capture the upside?
The answer, for those focused on long-term wealth creation, isn’t choosing one over the other. It is about building a balanced portfolio designed for any weather. Here is how to construct a nearly “unbeatable” Canadian stock portfolio that aims to both protect capital in a downturn and capture gains in a rally.
Defensive stocks are the ballast of any resilient portfolio. They provide essential services, generate predictable cash flow, and hold up better during economic uncertainty. In Canada, Fortis (TSX:FTS) and Waste Connections (TSX:WCN) are best-in-class examples.
Fortis is a regulated electric and gas utility with operations across Canada, the U.S., and the Caribbean. Its core business—transmission and distribution—is a natural monopoly. With approximately 95% of its assets in these low-risk operations, its earnings are highly predictable. Families and businesses need power and heat in any economy, giving Fortis a formidable moat.
The company stands out for its commitment to shareholders. It has increased its dividend for 52 consecutive years, holding one of the longest active streak in Canada. Looking ahead, a $28.8 billion five-year capital plan is expected to grow its rate base at a compound annual growth rate of roughly 7%, reaching $57.9 billion by 2030. Management expects this to support dividend growth of 4% to 6% annually through the decade. For investors seeking stability, Fortis is a pillar of strength.
Waste Connections is a leading player in the essential services of solid waste collection, transfer, and disposal. Like utilities, its services are non-discretionary. The company’s strategy focuses on secondary and exclusive markets, where competition is lighter, allowing for sustained high operating margins.
Its growth formula is powerful. Over the last five years, it has completed roughly 100 acquisitions, contributing an estimated $2.2 billion in annualized revenue. And it’s not stopping. The company has a strong pipeline of private company acquisitions with the potential to add another $5 billion in annual revenue. Beyond M&A, Waste Connections is expanding its renewable natural gas portfolio, with several facilities coming online and a new state-of-the-art recycling facility planned for next year. This combination of organic execution and strategic acquisitions has delivered an average annual total shareholder return of approximately 16.2% over the past decade, proving that defense can also deliver offense.
If defensive stocks are the shield, growth-oriented stocks are the spear, providing the thrust that can outpace the broader market. In the current environment, Sprott (TSX:SII) and Canadian Natural Resources (TSX:CNQ) are well-positioned in their respective cycles.
Sprott is an asset manager specializing in precious metals and critical materials investments. Rising geopolitical tensions, supply chain realignments, and the global focus on energy security are driving interest in gold, uranium, copper, and lithium. As a specialist in this space, Sprott is a direct beneficiary.
The company’s Assets Under Management (AUM) are swelling, driven by both market appreciation and strong inflows into its physical trusts and ETFs. This directly fuels management fees. The stock has already rallied 62% year-to-date. Looking ahead, if Middle East tensions persist and the strategic competition with China over critical minerals intensifies, demand for Sprott’s investment vehicles—including its uranium, copper, and lithium ETFs—should remain robust, supporting further earnings growth and share price appreciation.
Canadian Natural Resources is one of the country’s largest independent oil and gas producers. While surging oil prices are a clear tailwind, CNQ is much more than a simple play on geopolitics. Its true strength lies in its high-quality asset base, low-cost structure, and relentless focus on operational efficiency. These attributes allow the company to generate strong free cash flow and maintain a healthy balance sheet even when commodity prices soften.
This resilience supports a long-term dividend growth story and the financial flexibility for strategic acquisitions. CNQ holds a deep inventory of undeveloped land with low-capital, quick-payback drilling opportunities, providing a clear path to production growth. In a high-price environment, its earnings and cash flow surge. But even in a downturn, its efficient operations provide a cushion that many peers lack. CNQ is designed to perform across cycles.
The strength of this portfolio lies in its balance. It is not about picking one winner, but about pairing complementary forces:
Investors can adjust the weighting based on their risk tolerance. A conservative investor might lean heavily on the shield, allocating 70% or more to the defensive names for reliable income. An aggressive investor might seek a 50/50 balance, aiming for higher capital appreciation. By diversifying across different sectors and business models, this strategy aims to reduce portfolio volatility. It won’t eliminate risk—all investments carry risk—but a thoughtfully constructed, balanced portfolio is the most reliable way to stand firm when markets are shaken.
