Forget Dogecoin: These 2 Top Canadian Growth Stocks Are Rallying

Forget Dogecoin. These top Canadian growth stocks have been rallying and just reported stellar earnings!

| More on:
stock data

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The first cryptocurrency only appeared about 13 years ago, a short time compared to the long history of the stock market. Importantly, it’s impossible to tell if Dogecoin or some other new cryptocurrency has staying power.

It might make sense to hold a basket of cryptocurrencies, including Dogecoin, as a small percentage of a diversified investment portfolio for long-term investment. However, it’s probably best to invest primarily in proven assets like stocks and real estate for your portfolio.

If you hold Dogecoin and other cryptocurrencies, tuck them away, then forget about them. Consider buying these Canadian growth stocks that have performed well and just reported stellar earnings!

Savaria

Savaria (TSX:SIS) just reported strong Q1 2021 results with revenue growth of 27% to $112 million and adjusted EBITDA growth of 40% to $17 million versus Q1 2020. On a per-share basis, the adjusted EBITDA increased by 29% to $0.31.

A part of the quarter’s results was helped by the Handicare Group AB acquisition completed on March 4. Handicare had an enterprise value of more than $520 million. The acquisition expanded Savaria’s product offerings and geographical reach.

The dividend stock has done well by delivering total returns that outperformed the market returns in the past 12 months, five years, and 10 years. It offers a nice yield of 2.6% and will likely continue outperforming in the long run. The stock’s 10-year annualized returns are north of 29% — a 16-bagger!

SIS Total Return Level Chart

Total Return Level data by YCharts.

Savaria’s 10-year dividend growth rate is 16%, despite cutting its dividend in three of those 10. It has increased its dividend for the past six years. And it’s hard to imagine it cutting its dividend with expected strong earnings growth over the next few years.

Savaria is a small-cap stock with a market cap of about $1.2 billion that comes with acquisition and integration risks. So, expect volatility along the way.

Management expects to double its revenue in about five years with a focus on product innovation and continuous improvement, production efficiencies, and organic sales growth, benefiting from a growing global aging population.

Savaria is a global company that provides accessibility solutions for the physically challenged to increase their comfort, mobility, and independence. It generates sales in more than 40 countries with 30 direct sales offices, over 1000 dealers and 15 manufacturing or distribution facilities, in 12 countries.

A five-bagger in one year

Converge Technology Solutions (TSX:CTS) just reported record Q1 2021 results with revenue growth of 28% to $310 million and adjusted EBITDA growth of 71% to nearly $19 million versus Q1 2020.

Coincidentally, similar to Savaria, the small-cap IT stock has a market cap of about $1.2 billion. It just graduated from the TSX Venture Exchange to the TSX in February, so it’s still relatively unknown to the investing community. Analysts are jumping on fast, though. Currently, nine analysts cover the stock.

The tech stock popped more than 6% after reporting its Q1 results. However, analysts still think it’s undervalued by about 18%.

Notably, Converge is one of the fastest-growing IT service providers in North America. It provides hybrid IT solutions to the mid-market and has been employing a successful M&A strategy due to its cross-selling and integration capabilities.

Coming from a low base, the stock is already a five-bagger from a year ago!

XIU Total Return Level Chart

Total Return Level data by YCharts.

In the Q1 earnings call, management revealed that it aimed to increase its revenue to $5 billion by the end of 2025. This could lead to the stock tripling in that period! Above all, the growth plan will rely on the success of Converge’s European expansion and growth in its managed services. More details will be disclosed in its annual general meeting coming up on June 23.

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 Kay Ng owns shares of Converge. The Motley Fool recommends Savaria.

More on Dividend Stocks

growing plant shoots on stacked coins
Dividend Stocks

2 Oversold TSX Dividend Stocks to Buy Now and Own for 25 Years

These top TSX dividend stocks look oversold and now offer attractive yields for TFSA and RRSP investors.

Read more »

Profit dial turned up to maximum
Dividend Stocks

RRSP Investors: 2 Undervalued TSX Stocks to Buy Now for Total Returns

Top TSX dividend stocks are now on sale for RRSP investors seeking attractive total returns.

Read more »

TFSA and coins
Dividend Stocks

2 Beaten-Down Stocks to Buy for Your TFSA

Two beaten-down, but high-yield TSX stocks are profitable options for TFSA investors.

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Dividend Stocks

Inflation Soars to 7.7%: 1 Dividend Stock to Buy Now

Enbridge (TSX:ENB)(NYSE:ENB) stock looks like a magnificent dividend stock to help Canadians deal with inflation at 7.7%.

Read more »

Dividend Stocks

RRSP Investors: 2 Oversold Dividend Stocks to Buy Now for Total Returns

These great Canadian dividend stocks look cheap today for an RRSP focused on total returns.

Read more »

Volatile market, stock volatility
Dividend Stocks

2 Dividend Stocks to Own When the Market Is in Turmoil

Two TSX stocks can sustain dividend payments, even if the present market turmoil extends longer than expected.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Passive-Income Stocks to Help You Through This Market Correction

These three passive-income stocks offer stellar dividends around 6% to help get you to the other side of this market…

Read more »

Coworkers standing near a wall
Bank Stocks

Policy Rate: 2 More Hikes After July 2022 to Reach Neutral Level

The Bank of Canada might need three more rate hikes beginning in July 2022 to reach neutral levels.

Read more »