By investing over a long period, you can create substantial wealth by harnessing the power of compounding. Besides, this strategy also shields your investments from short-term fluctuations. Meanwhile, identifying stocks with solid underlying business and healthy growth prospects is also equally important. The pandemic has brought in numerous changes to people’s habits. Amid changing customers’ behaviour, here are four Canadian stocks poised for substantial growth over the next 10 years.
The pandemic has boosted e-commerce growth due to increased adoption of online shopping and shift towards omni-channel selling model. This transition could benefit Nuvei (TSX:NVEI), which provides payment technology solutions to merchants and partners worldwide. With a portfolio of 470 APMs (alternative payment model), the company operates across 200 markets. Further, it also provides pay-in and payout services to 40 cryptocurrencies.
Besides, Nuvei is also working on closing the acquisitions of Mazooma and Simplex. Mazooma’s acquisition could strengthen its position in the U.S. online gaming and sports betting industry, which offers high growth prospects amid increased legalization. Meanwhile, Simplex offers payment solutions to the cryptocurrency industry, which is becoming more popular and striving to enter the mainstream financial world. So, given its multiple growth drivers, I expect Nuvei to outperform the broader equity markets over the next 10 years.
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Second on my list would be goeasy (TSX:GSY), which provides financial services to non-prime customers. Over the previous 20 years, the company has delivered an impressive performance, with its adjusted EPS growing at an annualized growth rate of 24.9%. Despite its strong growth, the company has acquired less than 3% of its addressable market of loans under $50,000 for Canadian sub-prime customers. So, the company has incredible growth prospects.
Meanwhile, to expand its market share, goeasy is focusing on developing new innovative products, expanding its distribution channels, venturing into new markets, and improving its customer experience by investing in digital and technological developments. Further, it also completed the acquisition of LendCare Holdings in April, which has accelerated its growth in the consumer credit market. Thus, I believe the uptrend in goeasy to continue for several more years.
The electric vehicle (EV) market is witnessing strong growth over the last few years, as more customers are shifting toward eco-friendly cars. Amid the shift, I have selected Magna International (TSX:MG)(NYSE:MGA), which has significant exposure to the EV market, as my third pick. With its joint ventures with Beijing Electric Vehicle Company and LG Electronics, the company is well positioned to benefit from the EV market growth.
Besides, Magna International also produces a wide range of electric powertrain products used in EVs. The company’s management expects that by 2023, 50% of its production will be EVs. Further, the company could also gain from the entry of tech giants, such as Google and Apple, which have announced their intentions to enter the EV market. So, given the sector tailwind and its growth initiatives, I am bullish on Magna International.
Amid increased legalization, growing medical applications, and rise in cannabis acceptance, Research and Markets project the global cannabis market to grow at an annualized growth rate of 28% over the next six years. Amid the expanding cannabis market, I have selected Canopy Growth (TSX:WEED)(NYSE:CGC) as my final pick. It has acquired a substantial market share in the Canadian cannabis-infused beverage segment through its expanded product offerings.
In association with Martha Stewart, the company offers a wide range of CBD product offerings, such as gummies, soft gels, oil drops, and beverages, in the United States. In April, the company joined hands with Southern Glazer to expand the distribution of its CBD-infused beverages across the United States. Further, the company also owns warrants, which allows the company to acquire Acreage Holdings once the federal government legalizes cannabis.
Besides, Canopy Growth’s financial position also looks healthy, with its cash and cash equivalents standing at $1.59 billion at the end of last year. So, the company is well equipped to benefit from the expanding cannabis market.
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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.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Alphabet (A shares), Alphabet (C shares), and Apple. Tom Gardner owns shares of Alphabet (A shares) and Alphabet (C shares). The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool recommends Magna Int’l and recommends the following options: short March 2023 $130 calls on Apple and long March 2023 $120 calls on Apple. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.