The Motley Fool

$20,000 in This Stock Could Make You a Millionaire in 5 Years

Image source: Getty Images

The Tax-Free Savings Account (TFSA) is an excellent investment tool that has become popular among Canadians in recent years. Investors had little cumulative contribution room to work with when the TFSA launched in 2009. Those who managed to use the account to their advantages and maximized its benefits have successfully become millionaires.

Becoming a millionaire using this investment vehicle requires a keen eye for excellent growth opportunities. Today, the cumulative contribution room in a TFSA is $75,500, making becoming a TFSA millionaire in a few years a more attainable goal.

Why the TFSA is an ideal growth vehicle to become a millionaire

North American markets have proliferated significantly since the February and March 2020 pullback. While many investors lost significant returns last year, the economic fallout from the pandemic also created fertile ground for value-seeking investors. We have seen explosive growth in the tech and healthcare sectors amid the pandemic.

Today, I will discuss a stock that can offer you substantial returns by capitalizing on the favourable conditions in both industries.

WELL Health Technologies

WELL Health Technologies (TSX:WELL) is an excellent stock to consider. The stock has thrived in the face of the pandemic. At writing, the stock is trading for $7 per share, boasting a return of over 270% in the last 12 months. The stock’s five-year returns are even greater. WELL Health Technologies’s current valuation represents returns of 6,263.64% in the last five years, despite a significant pullback in February.

WELL Health focuses on providing omnichannel healthcare services across North America. The demand for telemedicine services is rising given its sustainability, accessibility, cost effectiveness, and convenience. The company is also looking to aggressively expand its geographical footprint through strategic acquisitions.

WELL Health recently announced acquisitions of Intrahealth Systems and CRH Medical. These deals could drive the company’s annual revenue to above $300 million.

The stock is trading for a discount of over 24% from its February 2021 peak. The broad tech sector pullback has created an excellent opportunity for investors to buy its shares on the dip.

If you invested $20,000 in the stock five years ago, your investment would be worth over $1.2 million in the space of just five years. While a similar growth in the next five years is not guaranteed, the stock has the potential to provide substantial returns to its shareholders in the long run.

Foolish takeaway

I want to point out that the past performance of a stock does not necessarily mean that its growth in the future will be similar. However, the surge in the importance of telehealth technology amid the pandemic has laid the groundwork to revolutionize healthcare.

You can expect the stock to deliver stellar returns on the back of its solid financial performance combined with the company’s strategic acquisitions and increasing telehealth adoption worldwide. I believe that its growing scale, global expansion, and favourable industry trends could make it a millionaire-maker stock to consider adding to your portfolio.

Speaking of millionaire-makers for your portfolio…

Looking for the Next Potential Netflix? We’ve Got You Covered with These 3 Free Stock Picks

Motley Fool Canada's market-beating team has just released a new FREE report that gives our three recommendations for the Next Gen Revolution.
Click on the link below for our stock recommendations that we believe could battle Netflix for entertainment dominance.

Click Here to Get Your Free Report 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.

Fool contributor Adam Othman has no position in any of the stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.