Young investors should buy growth stocks. Why? When you are young, you have many years ahead of you. If you want to have a lot of money at your retirement, you need to find stocks that will rise fast. You don’t need to focus on dividends at that stage, because you don’t need to live off your investments.
However, growth stocks are not all equal. You can take more risk when you are young, but you shouldn’t take too much risk either. You want your money to grow but not risk losing all your capital.
These three stocks have a history of strong growth and, I believe, still have many good years of growth ahead of them.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD.B) stock has an impressive compound annual growth rate of return (CAGR) of 31% over 10 years. And the stock still delivers impressive returns, with a return over 20% year to date.
Couche-Tard is one of the world’s largest convenience store chains. The company has successfully realized several acquisitions and has been expanding its high-profit food services operations. This includes the expansion of coffee, food and beverage programs that grew by double digits last year.
The Quebec-based convenience store giant is aiming to double its net profit in the next five years even after its operations dramatically expanded in North America and Europe. The company will achieve this target through a combination of organic growth and other acquisitions.
Badger Daylighting
Badger Daylighting (TSX:BAD) is another strong performer both over the long term and short term. The stock 10-year’s CAGR is almost 30%, and it has soared by 53% since the beginning of the year.
This Calgary-based company is in the business of digging holes with hydrovacs. Most of its growth is coming from the U.S., as almost 75% of revenue comes from this country. Badger has been focusing its sales and marketing efforts in the U.S. since the low oil prices weakened Alberta’s economy.
Badger continues to expand its hydrovacs fleet. The company had 1,241 hydrovacs in operation as of March 31 compared to 1,221 on December 31, and 1,154 a year ago. Customers are increasingly adopting hydrovac excavation as a method of non-destructive and safe excavation.
Badger continues to invest in all aspects of its business to facilitate long-term sustainable growth. These investments will ultimately drive further revenue, margin, and operational improvements in the years to come.
Constellation Software
Constellation Software (TSX:CSU) is the stock that has risen the most over the last 10 years among the three stocks in this article, showing an impressive CAGR of 44% over that period. It’s also one of the best-performing stocks of the TSX. And the stock is still performing very well, having risen by 50% since the beginning of the year.
Constellation acquires, manages, and builds vertical market software businesses. It has bought over 200 small software companies that target specific niche markets. These companies license software solutions for both the private and public sector that are hard to replace.
Although Constellation has made many acquisitions, the company says that it has a database of over 40,000 acquisition targets with additional opportunities outside of vertical market software.
