Despite the Canadian benchmark index, the S&P/TSX Composite Index, trading close to its all-time high, there are few excellent buying opportunities. These four Canadian stocks can deliver superior returns this year, given their high-growth prospects.
Sub-prime lender goeasy (TSX:GSY) has been one of the top performers over the 20 years, with its revenue and net profits growing at a CAGR of 13% and 29%, respectively. Supported by these strong fundamentals, the company has delivered impressive returns of 1,650% over the last 10 years at a CAGR of 33.1%. Despite the strong growth, the company still trades at an attractive valuation, with a forward price-to-earnings multiple of 14.4.
With the improvement in the economic activities amid the gradually reopening of the economy, the demand for the company’s services could rise. Further, its expanded product offerings, geographical expansion, and strategic acquisitions could also support its growth prospects in the coming quarters. Given its high-growth prospects, I am bullish on goeasy. Besides, the company also rewards its shareholders by paying dividends at a healthier yield of 1.8%.
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The e-commerce sector has witnessed substantial growth over the last 15 months amid increased adoption of online shopping and a shift towards an omnichannel selling model. This transition could benefit Nuvei (TSX:NVEI), a non-bank payment processor. It operates across 200 markets, supporting 470 alternative payment methods, 150 currencies, and 40 cryptocurrencies.
Further, the company is working on completing the acquisition of Mazooma Technical Services and Simplex. Mazooma’s acquisition would strengthen Nuvei’s position in the United States’s online gaming and sports betting industry. Currently, the company services licensed online sports betting operators across the 10 states in the United States. Further, amid the cryptocurrency boom, Simplex’s acquisition could also be a significant growth driver. So, given its multiple growth drivers, I expect the uptrend in Nuvei to continue.
After delivering impressive returns of around 150% last year, Lightspeed POS (TSX:LSPD)(NYSE:LSPD) was under pressure earlier this year amid concerns over its high valuation. However, its impressive fourth-quarter performance last week increased investors’ confidence driving its stock price higher. Year over year, its revenue grew 127%. Along with organic growth, the acquisition of Upserve and ShopKeep drove its revenue.
Meanwhile, the demand for the company’s service could sustain, even in the post-pandemic world amid the secular shift towards the omnichannel selling model. The expansion of its product offerings, penetrating newer markets, and strategic acquisitions could also drive its financials in the coming quarters. For fiscal 2022, the company’s management expects its revenue to come between $430 and $450 million, representing year-over-year growth of at least 94%. The company’s adjusted EBITDA margin could also improve. So, I believe Lightspeed POS would be an excellent buy right now.
WELL Health Technologies (TSX:WELL) has been under pressure this year after delivering stellar returns of 416% last year. The concerns over its high valuation appear to have weighed on its stock price. Meanwhile, the telehealthcare sector is one of the hottest growth segments right now. Besides, the company is actively pursuing acquisitions, which have accelerated its growth.
In this quarter, WELL Health has completed the acquisition of CRH Medical, ExecHealth, and IntraHealth. With these acquisitions, the company’s annualized revenue run-rate is around US$300 million. Further, CRH Medical could report an EBITDA of US$60 million this year. So, its acquisition could improve the company’s profitability also.
Given its expanding market share, appetite for acquisitions, digitization of clinical assets, and cost-cutting initiatives, I expect WELL Health’s growth rate to continue, boosting its stock price.
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.
The Motley Fool owns shares of Lightspeed POS Inc. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.