Methodology: The companies on the above table each have market caps of greater than $1 billion, debt ratings of A- or better from rating agency Standard & Poor’s and dividend yields of at least 2%. Furthermore, they posted returns on equity of more than 12% and had low betas (less than 1.0), which is a fancy way of saying they are less volatile than the equities market in general.
Why you should care: “A good offence is the best defence” might be a great adage for sports. But it leaves a lot to be desired when it comes to long-term wealth creation for conservative investors. If you hope to protect your life savings from the many global economic risks that threaten portfolios today—ranging from an end to stimulus spending and central bank tightening to creditor concerns over sovereign debt and soaring oil prices—then aggressive investing strategies are not the way to go. Instead, consider defensive plays, a.k.a. large-cap dividend stocks that suit the so-called widows-and-orphans crowd.
Worth noting: Stocks on this list last year delivered an average 18.5% return. National Bank was the best performer, generating a 33.6% return. The Montreal financial institution, a primary opponent to the proposed merger between TMX Group and London Stock Exchange, made the cut again this year. But when it comes to defensive plays, steady performance is key, and Canadian Utilities and IGM Financial—which returned 10.3% and 15.2% respectively—have both made this screen’s cut for at least five years running. Of these companies, analysts are most bullish on Canadian Utilities, which has a mean analyst stock price target of $58.