3 Top TSX Growth Stocks to Buy at a Discount

Growth stocks have been struggling over the past few months. However, this provides investors an excellent opportunity to buy the dip. Which three stocks should you consider?

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It’s no secret that growth stocks have been struggling since the start of the year. In fact, the performance of growth stocks seemed to get worse as the months rolled on. In February, investors were hit with the initial decline, only to be hit by red days after red days in March and April. Despite all that, it’s still a good opportunity to load up on shares while stocks are trading for cheap. In this article, I will discuss three stocks that would make great buys today.

A forgotten growth stock

One of the most popular growth stocks in 2020 was Lightspeed (TSX:LSPD)(NYSE:LSPD). After a relatively successful IPO, Lightspeed was hit hard by the initial market crash at the start of the pandemic. During its monumental decline, investors saw the stock lose more than 70% of its value. However, from its lowest point, Lightspeed stock would go on to gain more than 625%! This run was so impressive that Cathie Wood at ARK Invest began loading up on shares.

Unfortunately for investors, Lightspeed stock has since gone on to lose more than 30% of its value since hitting its peak in February. Why is the outlook still positive for this company? Lightspeed has shown that it has the potential to grow into a future market leader. The company has been posting record revenues quarter after quarter, due in large part to its smart acquisition strategy. Today, Lightspeed is valued at a market cap of $9.2 billion. If this company can grow as large as it has the potential to, investors will be in for massive gains.

This stock should be appealing to growth and dividend investors alike

When you find a stock that can outperform the market over multiple years, while offering investors an attractive dividend, it’s probably a good idea to buy into the company. That’s exactly what investors have been getting from Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP). Even with the stock’s 25% decline since the start of the year, Brookfield Renewable has managed to post a return of about 130% over the past two years.

Brookfield Renewable’s long-term goal is to post returns of 12-15% on an annual basis. While that’s much lower than the company’s performance over the past two years, it would still outperform the broader market. In addition to its growth targets, Brookfield Renewable aims to raise its dividend distribution by 5-9% annually. Since 2012, it has met those targets, raising its distribution by a compound annual growth rate of 6%. Clearly, the stock is right on track. This recent decline shouldn’t deter investors.

The top growth stock in Canada

This final stock doesn’t need much of an introduction. Shopify (TSX:SHOP)(NYSE:SHOP) is a stock that all growth investors should carry in their portfolio, if they can allocate a responsible amount of capital towards it. That may be difficult for investors that are just starting off, since the stock has been trading above $1,000 for nearly a year.

Shopify holds the second largest share of the online retail market in the United States. That is no easy feat considering it had to beat out companies like Apple, eBay, and Home Depot to claim that spot. Shopify’s year-over-year growth has continued to impress. In its Q1 2021 earnings report, the company announced an increase of 110% in its quarterly revenue year over year. This stock may not be having a great year, but it’s proving that the company can continue growing after the pandemic.

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 Jed Lloren owns shares of Apple, Brookfield Renewable Partners, and Shopify. David Gardner owns shares of Apple. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Apple, Home Depot, Shopify, and Shopify. The Motley Fool owns shares of Lightspeed POS Inc. The Motley Fool recommends eBay and recommends the following options: long January 2023 $1140 calls on Shopify, short January 2023 $1160 calls on Shopify, short March 2023 $130 calls on Apple, short June 2021 $65 calls on eBay, and long March 2023 $120 calls on Apple.

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