After watching technology stocks get hammered last week, I’ve been thinking about something that doesn’t always get enough attention when we’re researching investments. How predictable is a company’s revenue? It’s easy to get excited about a business promising massive growth. I’ve certainly been guilty of paying more attention to potential upside than the stability of the business underneath it.
But there’s something appealing about companies that keep getting paid by the same customers, year after year. Think about software that businesses can’t easily operate without, waste collection contracts that renew regularly, or professional information services that customers depend on to do their jobs. Those aren’t necessarily the most exciting businesses. But they can make interesting long-term investments.
Of course, recurring revenue doesn’t guarantee rising profits or a rising share price. A company can have loyal customers and still be a terrible investment if you pay too much. For readers also exploring Canadian defensive stocks, this is a different angle: customer relationships and revenue quality. With economic uncertainty heading into 2027, I’ve narrowed my research to five TSX-listed companies with dependable revenue streams, repeat customers, or subscription-based business models. Here’s how I’d rank them today.
All share prices and market capitalizations are approximate, in Canadian dollars, based on October 30, 2026. Financial results are reported in U.S. dollars unless otherwise specified.
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#5 Alimentation Couche-Tard (TSX: ATD)
Share price: $80.98
Market capitalization: $74.3 billion
Industry: Convenience retail and fuel
Why It Made My List
Couche-Tard isn’t a traditional recurring-revenue business. Nobody signs a five-year contract promising to buy coffee and snacks at Circle K. But customers do return regularly, and that repeat purchasing behaviour is exactly why I find the company interesting. Whether economic conditions are strong or weak, people still need fuel, groceries, and everyday essentials.
What I Like
Couche-Tard has built a massive international convenience-store network, giving it purchasing power and operational scale that smaller competitors struggle to match. Its latest quarterly results showed U.S. same-store merchandise sales increasing 1.7%, while adjusted earnings per share grew 15.4%. What caught my attention was that fuel volumes declined in some markets, yet the company continued growing earnings through improved margins, acquisitions, and cost control.
That’s the kind of operating flexibility I appreciate.
One Thing I’d Watch
Debt and fuel demand. Couche-Tard continues expanding through acquisitions, which creates opportunities but also brings integration costs. Meanwhile, weaker consumer spending could pressure merchandise sales. Repeat purchases aren’t guaranteed revenue.
Would I Buy Today?
At roughly 17 times trailing earnings, Couche-Tard looks reasonably valued compared with several other companies on this list. I’d consider it for long-term exposure to consumer spending, although I’d monitor debt reduction and fuel profitability.
#4 Thomson Reuters (TSX: TRI)
Share price: $165.36
Market capitalization: $71.6 billion
Industry: Professional information and software
Why It Made My List
Thomson Reuters has something I really like: customers who depend on its products to perform specialized work. Lawyers, accountants, and corporate professionals rely on its research platforms, tax software, and compliance tools. Switching providers isn’t always simple when those systems are integrated into everyday workflows.
What I Like
In the second quarter, recurring revenue represented approximately 82% of total revenue. That’s an impressive foundation. Total revenue increased 9%, while organic revenue grew 8%. More importantly, operating cash flow increased 23%. The company is also investing heavily in artificial intelligence through products such as CoCounsel. I think AI could become an important growth opportunity here because Thomson Reuters already has established customers, valuable proprietary content, and existing distribution channels.
One Thing I’d Watch
AI competition. New tools are making professional research and document analysis faster and potentially cheaper. Thomson Reuters needs to demonstrate that its AI offerings create additional value rather than simply replacing revenue from older products. Its third-quarter results are scheduled for November 3, making those numbers particularly important.
Would I Buy Today?
I like the business considerably more than I like making predictions about its valuation. At approximately 31 times trailing earnings, I’d prefer to review the upcoming results before committing new money.
#3 Waste Connections (TSX: WCN)
Share price: $256.84
Market capitalization: $64.3 billion
Industry: Waste management and environmental services
Why It Made My List
Nobody gets excited about garbage collection. That’s partly why I like the business. Waste Connections provides essential waste collection, landfill, and disposal services throughout North America. Much of that business comes from ongoing customer relationships and service agreements. Even when households reduce discretionary spending, garbage still needs collecting.
What I Like
Waste Connections has built a strong network of waste-management operations, supported by valuable landfill assets. Those facilities aren’t easy or inexpensive for competitors to replicate. Its third-quarter revenue increased to approximately US$2.64 billion, while adjusted EBITDA reached nearly US$896 million.
The company also increased its quarterly dividend by 10%. That makes it worth comparing with other Canadian dividend growth stocks. I especially appreciate that management continues balancing acquisitions with returning capital to shareholders. This isn’t explosive growth, but the business has demonstrated an ability to generate substantial cash flow.
One Thing I’d Watch
Valuation. At approximately 41 times trailing earnings, investors are already paying a considerable premium for the company’s consistency. Commercial waste volumes can also decline when economic activity slows. A dependable business doesn’t automatically make its shares inexpensive.
Would I Buy Today?
I’d happily consider owning Waste Connections for the long term, but I’d prefer a more attractive entry price. It’s firmly on my watchlist.
#2 Descartes Systems Group (TSX: DSG)
Share price: $126.77
Market capitalization: $10.8 billion
Industry: Logistics and supply-chain software
Why It Made My List
Descartes is one of those Canadian technology companies I think deserves more attention. It provides software that helps businesses manage shipping, customs compliance, transportation, and international trade. And the more complicated global supply chains become, the more valuable those systems can be.
What I Like
In its latest quarter, services revenue represented approximately 94% of total revenue, although not every dollar of services revenue is necessarily a fixed subscription. Revenue increased 12%, while operating cash flow jumped 28%. That matters because it shows the company isn’t simply reporting accounting profits. It’s converting a meaningful portion of its operations into cash.
Descartes also had approximately US$401 million in cash at the end of July. I particularly like its ability to acquire complementary software businesses while expanding its global logistics network. Tariffs, customs requirements, and changing trade regulations could create additional demand for its services.
One Thing I’d Watch
Valuation and global trade activity. Descartes trades at approximately 42 times trailing earnings. That’s a substantial premium, especially if weaker international trade reduces transaction-related demand or customers delay software spending.
Would I Buy Today?
I really like Descartes as a long-term business. But at this valuation, I’d probably wait for a meaningful pullback or stronger earnings growth before adding shares.
#1 Constellation Software (TSX: CSU)
Share price: $3,393.39
Market capitalization: $71.9 billion
Industry: Vertical-market software
Why It Made My List
Constellation takes my top spot because its entire business model is built around acquiring specialized software companies that serve customers with ongoing needs. These aren’t necessarily household-name products. We’re talking about software used by municipalities, healthcare organizations, utilities, and businesses operating in specialized industries. Once these systems become essential to daily operations, replacing them can be complicated and expensive.
What I Like
Constellation has spent decades acquiring and operating these businesses, often allowing management teams to continue running them independently. Its second-quarter revenue increased 17% to approximately US$3.34 billion, while operating cash flow reached US$477 million. Free cash flow available to shareholders also increased substantially. What impresses me is the company’s ability to reinvest cash into acquiring additional businesses. That creates opportunities to expand its recurring maintenance, support, and software revenue. It’s a business model I find particularly attractive for patient investors.
One Thing I’d Watch
Organic growth. Despite the impressive headline revenue increase, organic growth was only 3% in the quarter, or approximately 1% after adjusting for currency movements. That tells me acquisitions are doing much of the heavy lifting. Constellation needs to keep finding attractive businesses at sensible prices without sacrificing investment returns. Its November 6 earnings release will be worth watching.
Would I Buy Today?
Constellation would be one of my favourite businesses on this list to own over the next decade. But at approximately 53 times trailing earnings, I’m not convinced investors need to rush. I’d rather buy an excellent business at a reasonable valuation than pay almost anything simply because I admire its history.
Final Thoughts
The biggest takeaway from researching these five companies is that recurring revenue comes in different forms. Constellation and Descartes rely heavily on specialized software relationships. Thomson Reuters benefits from professional subscriptions. Waste Connections generates repeat revenue through essential services.
Couche-Tard is different. Its business depends on customers repeatedly choosing its stores rather than signing long-term contracts. That distinction matters. As we move into 2027, I’ll be paying particular attention to three things: customer retention, organic revenue growth, and the price investors are paying for those future earnings.
I’d also be careful about building an entire portfolio around these five names. Three operate primarily in software or professional technology, so diversification remains important. For investors comparing them with Canadian blue-chip stocks for long-term investors, these companies offer useful examples of how dependable customer relationships can support a business through changing economic conditions. But they’re not necessarily all attractive investments at today’s prices.
A predictable business can help you sleep better at night. Paying too much for it can still keep you awake.
Disclaimer: This article is for educational and informational purposes only. It reflects personal investing research and opinions, not financial advice. Investors should conduct their own research and consider their individual financial circumstances before making investment decisions.
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