Over the last few weeks, the Canadian equity markets have turned volatile amid the concerns over a slowdown in economic recovery, higher inflation, and expectation of earlier-than-expected rollback of expansive monetary policies. Despite the rising volatility, I expect the following four Canadian stocks to deliver superior returns over the next two years, given their healthy growth prospects.
Amid the economic growth due to the easing of restrictions and favorable monetary and fiscal policies, the demand for goeasy’s (TSX:GSY) services is rising. Meanwhile, the company looks to expand its offerings, enter new markets, and strengthen its digital infrastructure to drive growth. Besides, the company’s acquisition of LendCare has added new business verticles and improved its risk profile.
Given its healthy growth prospects, goeasy’s management has set optimistic guidance for the next three years. The management expects its loan portfolio to increase from $1.8 billion as of June 30 to $3 billion by 2023. During this period, the company could deliver 22% of the adjusted return on equity annually. Despite its healthy growth prospects, the company still trades at an attractive valuation, with its forward price-to-earnings standing at 15.9. Also, it rewards its shareholders by raising its dividends at a healthier rate. Currently, its forward yield stands at 1.23%. So, despite the rising volatility, goeasy would be an excellent buy right now.
WELL Health Technologies
WELL Health Technologies (TSX:WELL) is another stock that could be a good addition to your portfolio, given the favourable market condition, strategic acquisitions, and improving financials. The demand for virtual healthcare services increased during the pandemic and could sustain, given its convenience and accessibility.
Besides, the company has continued with its aggressive acquisition strategy and has acquired CRH Medical, Intrahealth Systems, ExecHealth, MyHealth, and a 51% stake in Doctors Services Group. These acquisitions could strengthen its position in high-growth markets and boost its financials in the coming quarters. Further, WELL Health is working on acquiring a significant stake in WISP, which could expand its presence in the United States. So, given its healthy growth prospects, I am bullish on WELL Health.
My third pick would be Savaria (TSX:SIS), which has delivered impressive returns of over 50% this year. Its strong performance in the first two quarters and the acquisition of Handicare have driven its stock price higher. Meanwhile, the uptrend could continue, as the demand for Savaria’s products and solutions could rise in the coming quarters due to the growing aging population and increasing income levels.
Besides, Handicare’s acquisition has broadened its product offering, expanded its distribution network, diversified its revenue stream, improved product innovation, and boosted efficiency. So, Savaria’s outlook looks healthy. The company also rewards its shareholders with monthly dividends. Its forward yield currently stands at 2.16%.
Algonquin Power & Utilities
After delivering a solid performance over the last few years, Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) is under pressure this year, with its stock price losing over 7%. The correction has also dragged its valuation down to attractive levels. Currently, the company’s forward price-to-earnings stand at 19.1. So, I believe investors should utilize this correction to accumulate the stock for superior returns.
The transition toward clean energy could benefit Algonquin Power & Utilities, which plans to invest around $3.1 billion in renewable assets over the next five years. Besides, it also looks to strengthen its low-risk utility asset base and has planned to spend around $6.3 billion during this period. These investments could boost its financials in the coming years.
Additionally, Algonquin Power & Utilities also pays quarterly dividends, with its forward yield currently standing at a healthy 4.38%.
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 recommends Savaria Corp. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.