Canadian investors can earn life-changing returns from stocks in a wide assortment of sectors. While we often associate multi-bagger stocks with technology stocks, that is not always the case.
Here is a list of four unique Canadian stocks that have multiplied $10,000 investments into $100,000 or more. Most of these stocks have taken about 10 years to reach that mark, but they are still attractive stocks to own today as well.
A leading “dollar” store
Dollarama (TSX: DOL) only charges its customers a dollar or two (or three now) per item. Yet it has found a way to turn those dollars into some serious profits over time. In fact, over the past 10 years, Dollarama has turned a $10,000 investment into over $107,000. The fact is, it has captured a low-cost market niche that is difficult to replicate.
I don’t know about you, but I always go into Dollarama for one item and come out with a basket of sweets and extra odds and ends. It just has the right products and pricing mix for everyday life. For a grocery-type business, it earns incredibly high EBITDA margins that over 25%.
Likewise, it is hoping to grow its Canadian store count by nearly 50% over the coming decade. Similarly, it has a strong growth trajectory in South America. A stable, growing business makes this one Canadian stock to own for the next decade.
A lesser-known Canadian tech stock
Many Canadians have likely never heard of Enghouse Systems (TSX: ENGH). Yet over the past 10 years, it has turned a $10,000 investment into $124,000. Most of Enghouse’s operations are outside Canada. It has done a great job acquiring undervalued technology businesses, integrating them, and then turning them into high-cash-yielding machines.
This Canadian stock has recently experienced a fairly significant pullback. However, it could present some very good value here. In fact, it is trading below its historical valuation range. Due to the pandemic, its growth-by-acquisition thesis has somewhat slowed.
Yet it keeps churning out cash. Today, it has nearly $170 million of net cash on its balance sheet to deploy. I believe growth will eventually recover, and investors will be happy they held this great quality business.
A top Canadian logistics software stock
Descartes Systems (TSX: DSG)(NASDAQ: DSGX) has also earned the right to this honoured list. It has turned $10,000 into $134,000. It provides crucial cloud-based software-as-a-service solutions for logistics-intensive businesses.
Descartes operates the world’s largest multi-modal logistics network. Like Enghouse, Descartes has been growing its service offering through acquisition. Since 2014, it has completed 27 acquisitions worth over $1 billion.
This is a very expensive Canadian stock. However, Descartes’s garners very stable, growing revenues and produces very high-margin returns on that growth. Cross-border trade is increasingly becoming complex. Consequently, Descartes’s solutions are more key to its customers than ever. I might wait for a pullback, but this is definitely a top stock to hold for years to come.
An airline for freight
Speaking about transportation businesses, Cargojet (TSX: CJT) has been lifting heavy Canadian cargo for years. It has paid off handsomely for many investors. Had you put $10,000 into this stock in 2012, you’d be sitting on at least a $200,000 return (not including dividends). This might be one of the most underrated stocks in Canada.
While it had a great year in 2020, it has pulled back this year. That is a wonderful opportunity for unafraid Canadian investors. The company has a dominant position in the overnight freight market in Canada.
Now, it is looking to expand its services internationally. This stock only has a market capitalization of $3 billion. It has ample room to grow. If it can replicate its Canadian success elsewhere, it is likely that this stock could still create a lot of shareholder value.
