The past decade has seen one of the most lucrative periods in history for investors in the North American stock market. This is especially true of U.S. indexes, but many top Canadian stocks have also performed extremely well. The overall performance of the TSX has been dragged down by the heavy weightings of energy and materials equities.
It is important for investors to identify key trends and companies that are positioned to succeed over the next decade. Investors will navigate an environment that will likely see higher interest rates and a scale back of monetary stimulus. Solid research and investing fundamentals will be more important over the next decade.
With that in mind, let’s look at three stocks that savvy investors should look to buy-and-hold before we roll into the 2020s.
Badger Daylighting (TSX:BAD)
Badger Daylighting is a Calgary-based company that provides non-destructive hydrovac excavation services with its Badger Hydrovac System. Demand has soared for its hydrovac system. The company projects a hydrovac build between 190 and 220 units in 2019 and retirements of 40 to 60 units. Badger has managed to thrive even in a challenging environment in the oil and gas industry in Western Canada.
Shares of Badger were up 50.4% in 2019 as of close on May 22. The stock had climbed 67% year over year. In the first quarter of 2019, Badger generated record adjusted EBITDA of $33.3 million, up 36% from the prior year. It reported record first-quarter revenues of $141 million compared to $115 million in Q1 2018.
The stock has posted great growth over the past year, and it also offers a monthly dividend. It last paid out a monthly dividend of $0.0475 per share, which represents a modest 1.1% yield.
Goeasy is a Mississauga-based company that provides alternative financial services, including merchandise leasing of household furnishings and unsecured installment loans. Shares of Goeasy had increased 41.1% in 2019 as of close on May 22. The stock was up 17% from the prior year.
The rate tightening path pursued by central banks over the past two years has applied pressure on over-leveraged consumers. Goeasy provides alternatives to investors who may be unable to secure financing with top lenders. In the first quarter of 2019, the company reported a 46% year-over-year increase in its loan portfolio to $602 million. Earnings per share shot up 53% to $1.18.
Canadians will continue to feel the pinch from high debt as we move into the next decade, which should drive more customers into the arms of alternative lenders. Goeasy is a fantastic stock to pick up as it is poised to grow due to these trends. The company last announced a quarterly dividend of $0.31 per share, representing a 2.4% yield.
Shopify has been one of the top stories on the TSX since its initial public offering in 2015. Few Canadian tech stocks have been able to compete with the growth of their U.S. counterparts, but Shopify has proven to be the exception. Shares had climbed 97.8% in 2019 as of close on May 22, and the stock increased 110% year over year.
Shopify is set to benefit from the growth of e-commerce in the coming years. More and more consumers are migrating to online shopping, and Shopify offers a revolutionary platform for retailers in this sphere. In the first quarter of 2019, the company posted a 50% year-over-year increase in revenue to $320.5 million. Gross Merchandise Volume (GMV) also surged 50% to $11.9 billion.
The Ottawa-based tech giant is relying on its international expansion to fuel growth going forward. In the first quarter, it touted its multilingual push and said that more than 100,000 of its merchants now use its services in a language other than English.
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Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool owns shares of Shopify and Shopify. Badger Daylighting and Shopify are recommendations of Stock Advisor Canada.