With the S&P/TSX Composite Index continuing to touch new all-time highs, investors in Canada have certainly been seeing substantial returns. In a bull market such as this one, high-risk, high-reward plays are being rewarded. Of course, there are a number of top TSX stocks that fit this profile.
That said, those seeking consistent and stable long-term growth may be better off with other top TSX stocks. In this group, I’ve hand-picked three gems that I think are real winners that are creating long-term shareholder value.
Let’s dive in.
Top TSX stocks: Constellation Software
One of the top TSX stocks in terms of long-term growth has historically been Constellation Software (TSX:CSU). This Canadian large-cap stock is a major player in the software space. With a market capitalization of more than $46 billion, Constellation has gotten to this size by no accident.
Indeed, like many other high-growth stocks, Constellation is a growth-by-acquisition play. This company has successfully integrated more than 500 smaller companies into its portfolio. Accordingly, Constellation is an absolute behemoth in the software market globally.
This has been reflected in Constellation’s share price over time. Indeed, I’d invite all investors to check out this tech stock’s long-term stock chart. It’s a thing of beauty.
Until acquisition targets dry up (there are thousands of companies waiting to be bought) and Constellation changes its strategy (very unlikely), this growth is likely to continue. This is one of the top TSX stocks that remains on my top picks list for a reason.
Similar to Constellation, Boyd Group (TSX:BYD) has grown to an impressive size using an acquisition-first model.
Sure, the auto repair business isn’t sexy. It’s a rather “blah” business that many investors choose to ignore.
However, Boyd has been able to consolidate this sector with impressive success. This has allowed Boyd to not only capture more market share, but start dictating prices in this sector. The margin expansion potential of Boyd as it gets larger makes for an even more intriguing case to own one of the top TSX stocks in the market.
With more than 750 locations in North America, Boyd is certainly growing impressively fast. Should the company be able to pick up the pace of acquisitions over the medium term, there remains a lot of upside with this growth stock.
A bank as a growth stock? Well, that might be stretching it.
TD Bank has shown it’s not afraid to pull the trigger on big deals. This is a company that has impressively grown its footprint in the U.S. to be one of the largest retail banks on the east coast in the last decade.
That’s allowed TD to pay out a dividend for 64 straight years, making this a great income stock as well.
Accordingly, for those seeking both long-term capital appreciation as well as dividend income, TD Bank is a great stock. This company’s total return profile in recent decades has been one of the best on the TSX. And those betting on a company that will be around for a few more decades have a hard time betting against one of the top TSX stocks out there in TD.
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 Chris MacDonald has no position in any stocks mentioned in this article. The Motley Fool owns shares of and recommends Constellation Software. The Motley Fool recommends Boyd Group Services Inc.