The following Canadian growth stocks outperformed the market by multiple folds over the past 10 years. Both are trading at attractive valuations such that they’re likely to outperform again over the next five to 10 years!
Buy this Canadian growth stock in March 2021
Cargojet (TSX:CJT) stock seldom goes on sale. It is Canada’s leader in providing time-sensitive, premium air cargo services to major cities across North America.
Thanks to the advent of e-commerce, Cargojet has been a superb growth stock. It even outperformed Amazon stock in the past five and 10 years! In the last five years, CJT stock turned a $10,000 investment into about $76,880.
CJT’s stock price doubled last year alone due to greater demand for its services during the COVID-19 pandemic. Perhaps the market is expecting milder growth this year. Followed by the company releasing its fourth-quarter and full-year 2020 results yesterday, the stock stumbled.
In fact, since Cargojet stock’s all-time high of $250 in November 2020, it has been in a downward trend and has retreated about 30%. Now could be an excellent time to start buying the dip and get into the name that will continue to benefit from the e-commerce trend. The consensus among analysts is that the growth stock can appreciate about 56% over the next 12 months.
In 2020, Cargojet increased revenues by 37% to $668.5 million, while gross margins more than doubled to $250.5 million. Its adjusted EBITDA, a cash flow proxy, rose 87% to $291.4 million with the adjusted EBITDA margin improving 11.5% to 43.6%. Adjusted free cash flow was $196.8 million — four times what it was in 2019.
Yesterday, the stock traded at about $175 per share at market close. Thankfully, the company raised gross proceeds of about $350 million from an equity offering at a stock price about 21% higher earlier this year. So, it’s unlikely to need to raise more capital from the stock market anytime soon. The proceeds will go to expanding its domestic capacity and facilities, pursuing its growth in the U.S. and internationally, and repaying debt.
Buy this dividend-growth stock in March 2021
You may be puzzled as to why I recommend Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) next as a growth stock. Utilities are usually seen as low-growth, high-yield investments.
However, since its inception more than 10 years ago, and over the past five years, this high-growth utility stock has outperformed its peers and the market. Specifically, BIP delivered annualized returns of about 24% since inception.
BIP pays a nice dividend (of 4%) as a utility should, and it will grow faster than other utilities. Because of this, I’m labelling it as a growth stock in the utility space.
BIP owns, invests, and operates in high-quality global infrastructure. Its largest segments are utilities and transport that contribute to about 60% of its funds from operations, from which it pays out dividends.
One growth area BIP investors should be excited about is its data infrastructure, which includes data storage, transmission, and distribution. It is the utility’s fastest-growing segment. This segment’s FFO contribution climbed 44% last year thanks to M&A and organic growth and is quickly becoming a meaningful part of the business, totaling 14% of the utility’s overall FFO for 2020.
Here's another Canadian growth stock that can outperform over the next five to 10 years!
One little-known Canadian IPO has doubled in value in a matter of months, and renowned Canadian stock picker Iain Butler sees a potential millionaire-maker in waiting...
Because he thinks this fast-growing company looks a lot like Shopify, a stock Iain officially recommended 3 years ago - before it skyrocketed by 1,211%!
Iain and his team just published a detailed report on this tiny TSX stock. Find out how you can access the NEXT Shopify today!
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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Kay Ng owns shares of Amazon, Cargojet, and Brookfield Infrastructure Partners. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and CARGOJET INC. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS and Brookfield Infrastructure Partners and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.