Multiplying an investment several times over is the Holy Grail when it comes to personal portfolio managers. For Canadians looking to grow wealth significantly, it can be hard to navigate hot takes and headline blur. The following two stocks, though, could match quality with long-term capital generation.
The high-growth pick
With three-year returns estimated in the 900% range, Xebec Adsorption (TSXV:XBC) is a red-hot growth stock just waiting to break out. Not one to wait for a dip, given its trajectory, this is a stock to ride to the stratosphere. Already up 220% in the last 12 months, Xebec isn’t slowing down and has seen 30% share price growth in the last four weeks alone.
There are a couple of things that make Xebec look like the kind of stock you’d want to hold for three years plus. First up, it’s a solid play for clean energy. Xebec is a got-to stock for exposure to gas purification and filtration solutions. It’s diversified in those areas across industrial, energy generation, and renewables spaces. It’s also diversified geographically, including key markets in North America, Asia, and Europe.
Xebec can also boast a squeaky clean balance sheet. This certainly helps when it comes to buying stocks based on a multi-year growth thesis. Investors looking for a solid growth pick in the green power sector have a strong choice here. The upside thesis for the green economy is one of the few global trends likely to add wealth to a portfolio regardless of political interference.
One stock you “auto” check out
The Ontario auto parts maker Martinrea International (TSX: MRE) could prosper this fall. The auto industry is central to the debate around industrial stimuli south of the border. Indeed, this stock, as with Magna International, has seen some improvement after the Harris/Pence debate last week. The debate was also consequential enough to see cannabis stocks soaring on Senator Kamala Harris’s comments.
Investors looking forward to a Democrat win seem to be behind some of the bullishness in auto stocks this week. Indeed, the Trump administration has been seen as detrimental to the auto industry in some circles. Up 8.7% in the last five days, Martinrea could seen even bigger gains should the Democrats get voted into power come November. The name could have 60% upside, as per current high-target share price estimates.
Adding a green economy pick such as Xebec also satisfies this thesis. Of course, a pullback in these stocks could be forthcoming should November see an outcome contrary to the expectations of green energy and auto investors. But given the trajectory of each stock, growth could be expected in the long term, whatever the result.
Indeed, Martinrea could be looking at a rosy few years. Its expected earnings-growth rate could accelerate to as much as 207% annually. In time, that could work out well for dividend investors. Currently shelling out a 1.8% yield, Martinrea’s coverage ratio is expected to be around 11% in the next three years. Combined with that projected boost to its bottom line, Martinrea could be one to buy for dividend growth.
