Written by Demetris Afxentiou at The Motley Fool Canada

If there was a single word that describes how the market has performed in 2023 it would be volatile. That volatility has helped push the market into a bear market. And while the market gyrations may be temporary, it is important for investors to have stocks in their portfolios that can beat a bear market.

Here are two great stocks that can not only beat a bear market but actually thrive in one.

Start with a defensive pick that can provide an income, too

Fortis (TSX:FTS) is a well-known stock for defensive-minded investors. For those who are unfamiliar with the stock, Fortis is one of the largest utilities in North America. The company boasts 10 operating regions across the U.S., Canada, and the Caribbean.

Utilities like Fortis generate a stable revenue stream thanks to their lucrative business models. In short, utilities provide a service that is backed by long-term regulated contracts. Those contracts span decades in duration, which in turn provide a reliable and recurring revenue stream.

The sheer necessity of the utility service that Fortis provides makes it a compelling option to beat a bear market. This is because, unlike other expenses that consumers cut back on during a downturn, people cannot cut back on basic necessities like utilities.

That stable and recurring revenue stream allows Fortis to invest in growth and pay investors a handsome dividend. As of the time of writing, the yield on that dividend works out to 4.2%.

For those investors who drop $30,000 into Fortis (as part of a well-diversified portfolio), that translates into an income of just over $1,200. Recall that investors who are not ready to draw on that income can choose to reinvest it until needed. This allows an eventual income stream to grow further.

Additionally, Fortis has provided an annual uptick to that dividend for an incredible 50 consecutive years. That fact alone makes Fortis not only a stock to beat a bear market but also an option to buy and hold for long-term gains.

That’s part of the reason why Fortis is one of just a handful of companies that isn’t trading down this year. In fact, Fortis is up 4% year to date, which handily puts it into beat-a-bear-market territory.

Banking on success

When compiling a list of stocks to beat a bear market with, I would be remiss if I didn’t mention at least one of Canada’s big banks. The big banks offer stable revenue, long-term growth and a juicy dividend, and that makes them a must-have for any portfolio.

The one bank that investors should turn to in this market is Bank of Montreal (TSX:BMO). BMO is the oldest of the big banks and has been paying out dividends for nearly two centuries without fail.