1 TSX Stock That Could Thrive Even if the Economy Slows

By Daniel Da Costa at The Motley Fool Canada

With all the major headlines throughout 2026, whether it has been interest rate expectations, closely watched inflation readings, or the impact that the war between the U.S. and Iran has had on global energy markets, it’s not uncommon for investors to wonder if the economy could start to slow.

And when uncertainty begins to rise and concerns about a slowing economy start to build, it’s natural for investors to look for ways to de-risk their portfolios, whether that’s by buying more defensive TSX stocks or simply sitting on the sidelines until there’s more clarity.

But while those concerns are understandable, investors shouldn’t lose sight of the bigger picture.

The best long-term investments don’t depend on the economy

In uncertain environments like this, it’s important to remember that some businesses have such strong long-term growth potential, operate in essential industries, or both, that they can continue thriving regardless of how the economy plays out.

So, even if certain areas of the economy begin to slow, that doesn’t mean every industry will struggle.

While weaker consumer spending or slowing economic growth may weigh on some businesses, other sectors can continue benefiting from long-term trends that are largely independent of the broader economy.

That’s one of the biggest advantages of actually investing for the long term. Rather than trying to predict what will happen over the next few months, investors can focus on identifying high-quality businesses with competitive advantages, strong growth opportunities, and long track records of executing their strategies successfully.

And today, there are still plenty of industries with significant long-term growth potential, especially if you’re investing in companies that are well-positioned to capitalize on those opportunities.

So, if you’re looking for a TSX stock that not only has the potential to hold up if the economy slows but could continue thriving regardless of the economic backdrop, Capital Power (TSX:CPX) is one of the best companies to consider.

Capital Power is one of the most reliable dividend growth stocks on the TSX

At first glance, Capital Power might look like a fairly straightforward utility-style investment. However, once you dig into its business model, it’s easy to see why it’s such an attractive long-term holding.

Electricity is one of the most essential services in the economy. Regardless of whether economic growth accelerates or slows, homes, businesses, hospitals, and critical infrastructure all continue relying on a dependable supply of power.

That’s a major reason why Capital Power generates such reliable cash flow. More than three-quarters of its facility cash flow is secured through long-term power purchase agreements and capacity contracts with utilities, governments, and other investment-grade counterparties.

In many cases, the company isn’t just paid for the electricity it produces. It’s also compensated for keeping its generating assets available whenever they’re needed by the grid, which creates a ton of predictable and recurring revenue.

At the same time, Capital Power isn’t just a defensive stock built to pay a dividend, even though it does that too.

But rather than paying out all its cash, Capital Power offers a bit less income than some peers, with a yield of roughly 3.7% today, in exchange for higher long-term growth potential, as it uses some of those funds to continue investing heavily in expanding its generation capacity.

That’s why it’s such a reliable TSX stock to buy and hold for the long haul, regardless of the economy. It’s a company operating in an essential industry with reliable cash flow today and meaningful growth opportunities still ahead.

So, even if the economy slows, businesses like Capital Power are built to keep performing, which is exactly the kind of stock you want to own long term without having to worry about the economy.

The post 1 TSX Stock That Could Thrive Even if the Economy Slows appeared first on The Motley Fool Canada.

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Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool recommends Capital Power. The Motley Fool has a disclosure policy.

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