Ho ho ho! Merry Christmas!
If you own shares of great businesses, it doesn’t make sense to sell, especially if they exhibit high growth.
Here are two top growth stocks that are worth holding for a long time, possibly forever!
Alimentation Couche-Tard (TSX:ATD.B) stock has done incredibly well by more than doubling in the past five years — specifically, total returns were more than 17% per year in the period.
Over the next five years, it’s possible for Couche-Tard stock to double again as it expands into Australia next. It has already made a couple of bids for Caltex Australia, the largest fuel and convenience chain in the country.
However, if it becomes too expensive, Couche-Tard may just have to acquire smaller players first or explore other geographies, including the continents it’s already in — such is the advantage of being a global consolidator.
In any case, Couche-Tard has reduced its leverage ratio over the last few years after the big acquisition of CST Brands, to be able to make a transformative acquisition again without crippling its balance sheet.
The growth company has a strong track record of acquisitions and integrations. It juices out meaningful synergies and learns from them before applying the knowledge across its network of more than 12,500 convenience stores in North America and Europe. Most locations also offer road transportation fuel dispensing.
Simply put, Couche-Tard sells convenience and time by aiming to deliver fast and friendly service for consumers on a time crunch. It’s also making things more convenient for the company itself by consolidating its umbrella of brands into its international Circle K brand, which is already being used in about 2,280 licensed stores.
The rebranding is almost complete in North America and entirely complete in Europe such that Couche-Tard can offer unique promotions and gamification across geographies easily.
Brookfield Asset Management
Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) is another amazing growth stock that, like Couche-Tard, has more than doubled in the past five years — with total returns of about 16.5% per year. This was driven by its funds from operations per share more than doubling in the period.
BAM is a global alternative asset manager, owner, and operator. Most of the US$500 billion of assets it manages are cash cows, including real estate, renewable power, and infrastructure assets. It also has an investment arm in private equity, which is highly lucrative but can be quite volatile.
Despite its massive size of assets under management, BAM still has US$65 billion of capital available for new investments. Notably, BAM is a value investor that can invest across its four sectors of expertise globally. Therefore, it can seek the most attractive risk-adjusted opportunities to put capital to work.
As an operator, it can also buy assets at bargain valuations and improve them before selling them for colossal profits (or keeping them in the portfolio to generate higher cash flow than before).
BAM is an awesome growth stock, but it also kindly offers a dividend that’s increased by 33% in the past five years.
Accumulate shares in Couche-Tard and Brookfield Asset Management and ho ho hold them for a long, long time, as they have lots of growth runway!