Amazon.com, Inc (NASDAQ: AMZN) is one of the top stocks in the world and can often be a good benchmark when evaluating a growth stock against.
Some stocks even try to call themselves “the next Amazon” in the hopes that they can do as well as the tech giant. While that’s unlikely to happen over the long term, it’s certainly possible for stocks to outperform Amazon over a shorter period of time.
In 2019, for instance, there were multiple stocks that outperformed Amazon’s 23% returns on the TSX that could continue to be good buys today. Here are two of those stocks:
Lightspeed POS Inc (TSX: LSPD) wasn’t on the TSX for a full 12 months, but it still had a terrific debut on the markets, rising more than 90% since going public back in March.
The tech stock has been gaining popularity with investors, as one of the strengths of its business model is that it appeals to a wide range of small and medium-sized businesses, which can often be overlooked by some of the bigger software providers.
Its software makes it easier for companies to engage with their customers while also providing valuable analytics which can be used to make better, more informed decisions going forward.
Although the company is still nowhere near profitability, that isn’t always a deterrent for tech investors. What’s important is growth — and Lightspeed has been showing lots of it.
In fiscal 2016, its revenues were just US$30.7 million, which has more than doubled to US$77.5 million in fiscal 2019. If Lightspeed can continue to grow at such an impressive rate, there’s little doubt that the stock can continue to soar higher.
With a market cap of over $3 billion, it’s still a relatively small company that could be much bigger in the years to come.
TC Energy (TSX: TRP)(NYSE: TRP) hasn’t had nearly the same fanfare that Lightspeed has over the past several months, but it’s still been a good year for one of Canada’s top energy companies.
Up 42% in 2019, TC Energy has also soundly outperformed Amazon. However, with oil prices rising lately and showing strength, it could make the stock an even more appealing buy in 2020 if that trend continues.
With TC Energy, investors are getting a good deal on a stock that’s a solid value buy as well. Trading at a price-to-earnings (P/E) multiple of 16 and a price-to-book (P/B) multiple of 2.4, the stock will appeal to value-oriented investors.
By comparison, Amazon trades at a P/E of over 80 and its P/B is 16. Lightspeed also trades at 16 times its book value but with no profits it doesn’t have a comparable P/E.
Another reason for investors to consider holding TC Energy this year is that not only can it continue to generate strong returns in 2020, but it also pays a great dividend, which today yields 4.4% per year.
TC Energy is a much safer investment overall as the company has been a staple on the TSX — that’s not in danger of changing anytime soon.
