Income investors worried about the direction of U.S. stocks may want to take a peek north of the border.

Overall, Canada is a highly stable economy with a better track record than the United States in recent years. Indeed, Canada’s political and economic risks seem modest, especially if you’ve been watching the U.S. primaries.

Currently, the S&P/TSE Composite Index is down 23% from its high and is trading at a trailing price-to-earnings (P/E) ratio of 17 times, compared to the S&P 500 Index’s 21 times. On top of that, the Canadian economy should benefit from the recent recovery in minerals prices.

Thus, now is a good time to explore a few Canadian companies that might make sense for U.S. dividend investors.

Diversification – Without the Risk

Since the financial crisis, Canada has generally pursued more sound policies than the United States – and it has suffered less as a result.

One reason is that Canadian banks undertook only moderate amounts of big-ticket investment banking and were better regulated than U.S. banks. Canadian budget policy was also less profligate, with the budget often close to balance.

Some of that better policy resulted from the conservative government of Stephen Harper and his finance minister Jim Flaherty. Interest rates were low, but they never dropped to zero. The Canadian CORRA short-term rate is currently just above 0.5%.

The bad news is that Harper lost the election last September. He was replaced by Justin Trudeau and his liberal government, which is committed to the usual Keynesian expansion and wasteful spending.

During the election, Trudeau promised to keep the resulting budget deficits below C$10 billion, but the projected deficit for the year starting April 1 is C$18.4 billion – and that’s before new “stimulus,” which is set to be announced on March 22.

To be fair, the decline in oil prices has hit Canada’s budget receipts, so it’s not all Trudeau’s fault. Still, Canadian budget deficits need to be watched closely, even if the public debt (around 90% of GDP) is lower than the U.S. figure.