2 Canadian Stocks That Could Be Worth $200 Billion in No Time

These Canadian companies have proved they can stand the test of time.

| More on:
Question marks in a pile

Image source: Getty Images

There are a few high-quality Canadian businesses that continue to increase in value over time. While economic downturns or stock market corrections are an inevitable part of this growth, these Canadian companies have proven that they can stand the test of time and make money for their investors.

Despite changing business landscapes, these companies continue to evolve and have been able to create a solid customer base that helps them thrive for a very long period.

Here are two such high-quality Canadian businesses that could continue to grow at a rapid pace that could reach $200 billion valuation in no time.

Shopify

With a market cap of $149 billion, Shopify (TSX:SHOP)(NYSE:SHOP) is Canada’s largest publicly traded company. Like me, most of you would’ve heard many times that the rally in Shopify stock is over. However, I don’t believe that’s going to happen any time soon.

Shopify has ample catalysts that could help it to sustain the bull run and could become Canada’s first company to reach a $200 billion valuation in no time.

As online activities rise in North America and other parts of the world, Shopify is likely to benefit significantly. The company is already witnessing a surge in traffic on its platform as small- and medium-sized businesses are rapidly shifting online to meet the growing customer demand.

The sizeable shift to online should serve as a long-term tailwind for the company by driving traffic, revenues, and market share.

Shopify is adding new sales channels through partnerships with leading companies and has streamlined the onboarding process on its platform. Further, innovation, expansion of high-margin products like Shopify shipping and capital augur well for future growth.

Shopify’s growing merchant base and sustained demand indicate that it could become the first Canadian company to reach a $200 billion valuation. Its stock is a must-have in your portfolio, and over time, its value is only expected to  climb higher.

Shopify is slated to report its Q2 numbers on July 29, and I expect the company to post strong top-line growth led by higher traffic.

Royal Bank of Canada

Canada’s banking major, Royal Bank of Canada’s (TSX:RY)(NYSE:RY) is another company with strong growth potential to reach a $200 billion valuation soon. Its ability to drive its loans and deposits and cost-control measures should help the bank to navigate the current low-interest-rate environment with ease and continue to cushion its pre-provision, pre-tax earnings.

The reopening of the economy and increase in business activity is likely to support the Royal Bank of Canada’s credit offtake and deposits. Meanwhile, an improved efficiency ratio should support earnings.

In the most recent quarter, Royal Bank of Canada’s loans grew by 10%, while its deposits increased by 17%. The bank is well capitalized with a CET1 ratio of 11.7%.

The record low-interest-rate environment could decelerate the pace of growth for Royal Bank of Canada in the near-term, its strong competitive positioning and diversified asset base should drive its value over time.

The bank should perform pretty well once the economy recovers and continue to make money for its investors.

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 Sneha Nahata has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify.

More on Bank Stocks

Question marks in a pile
Bank Stocks

Should You Buy Canadian Western Bank for its 4.8% Dividend Yield?

Down 35% from all-time highs, Canadian Western Bank offers a tasty dividend yield of 4.8%. Is the TSX bank stock…

Read more »

analyze data
Bank Stocks

The Average Canadian Stock Investor Owns This 1 Stock: Do You?

This Canadian stock has about 49% ownership by the public, and with growth and dividends to consider, it's a top…

Read more »

falling red arrow and lifting
Stocks for Beginners

1 Dividend Stock Down 18% to Buy Right Now

CIBC (TSX:CM) is a strong dividend stock investors should certainly consider not just for passive income, but future growth as…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Tech Stocks

Forget TD Stock: 2 Tech Stocks to Buy Instead

TD remains a solid income stock but two outperforming tech stocks are better buys for their strong growth and upside…

Read more »

Question marks in a pile
Bank Stocks

Where Will Royal Bank of Canada Stock Be in 5 Years?

Royal Bank's continued focus on a strong capital position plus its acquisition of HSBC will likely ensure prosperous times ahead.

Read more »

Payday ringed on a calendar
Bank Stocks

How to Build a Bulletproof Monthly Passive-Income Portfolio With Just $10,000 and TD Stock

TD (TSX:TD) stock has been a poor performer over the last few years, but could be a big passive-income winner…

Read more »

Man considering whether to sell or buy
Bank Stocks

Is RBC Stock a Buy, Sell, or Hold?

Shares of Royal Bank of Canada have delivered game-changing returns to shareholders in the last two decades. Is RBC stock…

Read more »

Dice engraved with the words buy and sell
Bank Stocks

Is Scotiabank (BNS) Stock a Buy, Sell, or Hold?

Let's dive into whether the Bank of Nova Scotia (TSX:BNS) remains a solid buy or if it's more of a…

Read more »