In today’s Canadian economy, growth is in short supply. With a sluggish energy sector, falling home prices, and mortgage growth slowing to 17-year lows, it’s hard not to be pessimistic. However, amid the general stagnation, there are a few stocks that are growing like lightning — a handful of companies that have bucked the trend and delivered superior returns to investors. Many of these stocks have outperformed their top NYSE or NASDAQ peers in the same industry, and one of them has risen a whopping 46% year to date.
In this article, I’ll be looking at three of them, starting with a stock that’s easily outperforming top NASDAQ tech giants.
Shopify has easily been one of the fastest-growing TSX stocks over the past three years. Up 715% since its IPO, it added an impressive 46% to its lifetime return in the first three months of this year. It’s not hard to see why. Shopify has long been growing its revenue in the upper triple digits, and although the 54% top-line growth in the most recent quarter was down from past ones, it came along with increasing profits. The company is also rapidly branching out into enterprises outside its traditional e-commerce territory, like advertising and content production.
It’s definitely one to watch.
Lululemon Athletica (NASDAQ:LULU)
Lululemon is a top clothing company based in Vancouver. Although the stock is only listed on the NASDAQ, the company itself is as Canadian as hockey. Lululemon has over 400 retail stores around the world, where it sells its trendy athleisure items, including yoga pants and gym clothes. In its most recent quarter, Lululemon grew earnings by 60% and increased comparable store sales by 17%. Lululemon’s Q4 earnings will be released on March 27. This will be one to watch, as the company cut its Q4 outlook when it released its Q3 earnings.
Last but not least, we have (of all things!) an energy stock.
Before discussing Enbridge, it has to be mentioned that energy in general has earned itself a pretty poor reputation in recent years. In addition to the often mentioned environmental and social issues, the industry has been holding back overall TSX growth, dragging the index down to a low double-digit five-year return.
Despite this, the energy sector is home to a few diamonds in the rough — and Enbridge might be one of them. Up 13% year to date, it’s doing better than most TSX energy stocks, and it arguably has the fundamentals to back it up. In its most recent quarter, Enbridge grew its earnings by over 300%. Granted, that comes after several quarters of falling earnings, so it’s more a recovery than a dramatic growth spurt. Still, it goes to show that this stock is recovering from the energy slump better than most of its peers. The stock also pays a dividend, and the 6% yield is almost double the TSX average.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Andrew Button has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of Shopify and Shopify. Enbridge and Shopify are recommendations of Stock Advisor Canada.