TFSA Investors: 3 Growth Stocks Poised to Pop in 2020

Tired of sluggish returns? This trio of stocks, including Capital Power (TSX:CPX), could give your portfolio the boost of growth it needs.

| More on:
potted green plant grows up in arrow shape

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Hi, Fools. I’m back to draw attention to three attractive growth stocks. Why? Because companies with rapidly growing revenue and earnings

As the great Warren Buffett once said, “Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.”

If you’re looking to give your TFSA portfolio a boost in 2020 (with minimal downside), this is a good place to start.

How convenient

Leading off our list is Alimentation Couche-Tard (TSX:ATD.B), which has grown its EPS and revenue at a rate of 141% and 92%, respectively, over the past five years. Over the past year, shares of the convenient store giant are up about 20%.

Couche-Tard’s impressive growth continues to be supported by a massive network of stores (over 9,700 locations in North America), strong brands (Couche-Tard, Circle K, ingo), and steady cash flow generation. In the most recent quarter, EPS improved 11.5% on revenue of $11.5 billion.

More importantly, all of the company’s regions saw increases in same-store sales.

“We had steady growth in our convenience segment this quarter even as we cycled against an exceptional first quarter last year,” said CEO Brian Hannasch.

Couche-Tard currently trades at a forward P/E in the low-20s.

Power play

Next up, we have Capital Power (TSX:CPX), which has grown its EPS and revenue at a rate of 71% and 20%, respectively, over the past five years. Shares of the electricity provider have gained about 20% over the past year.

Utility stocks are typically known as stodgy investments, but Capital Power’s commitment to innovation, “future-focused” energy, and sustainable sourcing make it a growth-oriented opportunity. In the most recent quarter, net operating cash flow clocked in at $209 million as revenue jumped 31% to $517 million.

“We continue to have a positive outlook for Alberta power prices that is consistent with current forward prices of nearly $60 per MWh for 2020 and 2021,” said CEO Brian Vaasjo.

Capital Power currently offers a rather juicy dividend yield of 6.1%

Ritchie riches

Rounding out our list is Ritchie Bros. Auctioneers (TSX:RBA)(NYSE:RBA), which has delivered EPS and revenue growth of 71% and 235%, respectively, over the past five years. Shares of the heavy equipment auctioneer are up nearly 20% over the past year.

Ritchie Bros. continues to lean on its extensive customer base (over 530,000 customers around the globe), steady cash flow, and rock-solid balance sheet to deliver stable growth for shareholders. In the most recent quarter, EPS of $0.23 topped estimates as revenue increased 18% to $290 million.

“We are encouraged by improvement in the overall equipment supply, with our sales teams doing a good job of securing volume to help offset some pockets of price deflation in the quarter,” said interim co-CEO Karl Werner. “We remain focused on continued execution of our strategy and delivering exceptional service for our customers.”

Ritchie Bros. currently sports a dividend yield of 2%.

The bottom line

There you have it, Fools: three attractive growth stocks for 2020.

They aren’t formal recommendations. Instead, view them as ideas worth further research. Even stocks with breakneck growth can crash hard if you don’t pay attention to valuation, so plenty of due diligence is still required.

Fool on.

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 Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool recommends ALIMENTATION COUCHE-TARD INC.

More on Dividend Stocks

Happy couple being attended by office worker at office
Dividend Stocks

BCE Stock: A Great Pick to Boost Your RRSP Retirement Fund

BCE (TSX:BCE)(NYSE:BCE) stock is a dirt-cheap telecom stock with a huge dividend yield to keep RRSP investors happy.

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

Want Easy Passive Income? These 2 Canadian Dividend Aristocrats Deliver

Passive income stars like Slate Grocery REIT (TSX:SGR.U) should be on your watch list.

Read more »

stock research, analyze data
Dividend Stocks

RRSP Investors: 1 Cheap TSX Dividend Stock to Buy Now and Own for 35 Years

RRSP investors can still find top TSX dividend stocks to buy at discounted prices.

Read more »

Cogs turning against each other
Dividend Stocks

2 of the Safest Stocks (With Dividends) to Buy in Canada Now

Here are two of the safest stocks investors in Canada can buy now.

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

2 Top Canadian Value Stocks Worth Buying Right Now

Here's why Alimentation Couche-Tard (TSX:ATD) and Toronto-Dominion Bank (TSX:TD)(NYSE:TD) are two top value stocks to consider right now.

Read more »

Happy shoppers look at a cellphone.
Dividend Stocks

2 Bargain Stocks You Can Buy Today and Hold Forever

Here's why Fortis (TSX:FTS)(NYSE:FTS) and Manulife (TSX:MFC)(NYSE:MFC) are two bargain stocks I think are worth considering right now.

Read more »

Retirement plan
Dividend Stocks

Passive Income: How Canadian Couples Can Earn $747 Tax-Free per Month for Life

Canadian couples can take advantage of their TFSA contribution space to create a significant stream of tax-free passive income.

Read more »

Golden crown on a red velvet background
Dividend Stocks

3 Canadian Dividend Aristocrats to Buy for Passive Income Forever

Passive-income stocks like BCE (TSX:BCE)(NYSE:BCE) should be on your radar.

Read more »