My 3 Favourite Canadian Stocks Right Now

The Canadian equity market could continue to trend higher on the back of improving macroeconomic environment, ongoing vaccination, higher spending on omnichannel platforms, and revival in consumer demand. With high growth in mind, I am sharing three of my favourite Canadian stocks with strong growth catalysts and could be a great addition to your portfolio right now.

goeasy

goeasy (TSX: GSY) is my top stock pick for 2021 and has surged 58% this year. Despite the appreciation in value, I see further upside on the back of continued growth in its loan portfolio and a revival in consumer demand.

Notably, the steady improvement in the economy is driving goeasy’s loan origination volumes, which is encouraging. Apart from the improving macroeconomic environment, I expect the subprime lender to benefit from the launch of the auto loan product and its acquisition of LendCare. 

Its revenues and profits have consistently grown at a double-digit rate over the past several years. Moreover, I expect the momentum in its business to continue, while its top and bottom line could continue to grow rapidly thanks to the large addressable lending market, higher loan ticket size, operating leverage, and strong payments volumes. 

Besides stock price growth, goeasy could enhance its shareholders’ returns through higher dividends. Its dividends have grown by 34% annually in the last seven years, while it pays an annual dividend of $2.64 that translates into a decent yield of 1.7%. 

Bank of Montreal

Bank of Montreal (TSX: BMO)(NYSE: BMO) is one of my favourite stocks that could deliver superior returns in the long run. The bank marked stellar recovery and delivered a solid financial and operating performance in the last three consecutive quarters.

Thanks to the improving fundamentals, Bank of Montreal stock surged nearly 76% in one year and is up about 34% on a year-to-date basis. Despite the recent run-up, Bank of Montreal’s valuation is well within reach, indicating further upside in its stock. 

I expect the Canadian banking giant to consistently deliver high-single-digit growth in its bottom line in the coming years. Its diverse revenue base, expected improvement in loans and deposit volumes, increase in non-interest revenue, lower provisions, and expense management indicate that it could continue to deliver strong financial numbers in the future. 

Bank of Montreal will likely boost its investors’ value through regular dividend payments. It has paid dividends for a very long period and increased it at a compound annual growth rate of 6% in the last several years. Further, it is trading at a cheaper valuation than its peers and offers a yield of 3.3%. 

Lightspeed

Lightspeed POS (TSX: LSPD)(NYSE: LSPD) is also among my favourite growth stocks. The company has made its investors very rich and has delivered astounding growth. The demand for its commerce-enabling platform remains elevated, while the spending on omnichannel platforms continues to grow, signifying brighter days ahead for Lightspeed. 

I believe the shift in selling models and growing adoption of its digital payments platform could continue to support its revenues and drive its customer base. Further, its expansion into the high-growth markets, innovation, and up-selling opportunities augur well for future growth. Also, the increased adoption of its multiple modules by its existing customers will likely drive its average revenue per user. 

Notably, Lightspeed is also likely to gain big from its focus on strategic acquisitions that could accelerate its customer growth rate and solidify its competitive positioning in high-growth markets. Overall, Lightspeed has multiple growth catalysts to deliver outsized returns in the coming years.