Investors with a long-term mindset can build a significant amount of wealth by investing in the stock market. Also, you don’t need a large nest egg to start investing, as there are plenty of top-quality stocks available at attractive prices. So, if you can spare $300, the following three Canadian stocks are must-haves in your portfolio to build wealth in the long run.
goeasy (TSX:GSY) is undeniably one of the best Canadian stocks to create wealth. Its stellar financial performance and strong growth prospects have led to a multi-fold jump in its stock. For those who do not know, goeasy stock has appreciated about 2,400% in 10 years. Moreover, it has increased by nearly 768% in five years and is up about 171% in one year.
Despite the massive growth in its stock, goeasy is an attractive bet for investors with a long-term mindset. The subprime lender could gain significantly from the improving macroeconomic outlook, which is likely to drive loan origination and customer demand. Meanwhile, its omnichannel model, commercial partnership, new product launches, and strategic acquisitions could accelerate its top-line growth and support double-digit growth in its bottom line. Also, its strong payments volumes and operating leverage from growing scale and lower credit losses augur well for future growth.
goeasy has consistently delivered double-digit earnings growth in the past 19 years. Moreover, I expect the momentum to sustain in the coming years. Thanks to the stellar growth in its profitability, goeasy uninterruptedly paid dividends for 17 years in a row and increased it at a CAGR of 34% in the last seven years.
Bank of Montreal
Canadian investors looking for top long-term stocks could consider buying the shares of Bank of Montreal (TSX:BMO)(NYSE:BMO). The bank has consistently grown its earnings at a solid pace and boosted its shareholders’ returns through higher dividends. Thanks to its ability to grow earnings, Bank of Montreal regularly paid dividends for 192 years and increased it at a CAGR of 6% in the past 15 years.
I believe the steady growth in the economy, its diverse revenue model, and improving credit demand could provide a solid platform for future growth. Besides improving loan and deposit volumes, I expect Bank of Montreal to benefit from lower credit loss provisions and tight expense management.
Shares of Bank of Montreal registered growth of about 76% in one year. However, its valuation is still within reach, indicating further upside in its stock. Further, the Canadian bank pays a quarterly dividend of $1.06 a share, translating into a yield of 3.3%.
Cineplex (TSX:CGX) stock is up about 77% this year, yet it is trading at a massive discount compared to the pre-COVID levels. Its financial and operating performance took a significant hit from the outbreak of the pandemic, which eroded its revenues and operating capacity. However, the ongoing vaccination and expected recovery in its revenues and earnings are pushing its stock higher.
Despite the recent growth in its stock, Cineplex offers further upside and is an attractive investment at current levels. I expect the company to deliver a robust set of financial numbers, as its operations return to normal.
I expect a sharp sequential improvement in Cineplex’s revenues and earnings in the coming quarters, driven by the reopening of its entertainment venues and theatres. Moreover, its cash burn is likely to go down, while a lower cost base could continue to cushion earnings and drive its stock higher.
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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends CINEPLEX INC.