Top 5 Under-30 Canadian Stocks to Buy for Superior Returns

These under-$30 Canadian stocks have strong potential for growth and will likely outperform the benchmark index.

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The lower interest rate environment, solid liquidity, economic recovery, and strong consumer demand indicate that the stock market could continue to trend higher. As I’m bullish on equity, I have shortlisted five stocks with solid growth potential that could deliver superior returns. Further, these five Canadian stocks are priced below $30. 

Stock #1: BlackBerry

The ongoing digital shift, growing cybersecurity threats, and the recovery in the automotive market provide a solid foundation for growth in BlackBerry (TSX:BB)(NYSE:BB) stock. New product launches, solid billings, increased spending on cybersecurity, and customer growth will likely drive BlackBerry’s financials in the cyber security business. 

Furthermore, continued electrification and automation in the auto market will likely accelerate its growth rate. Overall, expansion of its total addressable market, momentum across its business, and design wins indicate that BlackBerry stock will likely deliver stellar returns in the coming years. 

Stock #2: Payfare 

Financial technology company Payfare (TSX:PAY) is a solid bet for investors to create a significant amount of wealth in the long run. The growing economy and its scalable platform indicate that Payfare will likely outperform the broader markets by a considerable margin.  

Its growing active user base, recurring revenues, lower customer acquisition cost, and partnership with leading marketplaces augur well for growth. Meanwhile, expansion onto new verticals and a large addressable market will accelerate its growth rate and support the uptrend in its stock. 

Stock #3: AltaGas  

With its balanced portfolio of low-risk utility assets and high-growth midstream business, AltaGas (TSX:ALA) is another attractive stock trading below $30. I expect its rate-regulated utility business to continue to generate predictable cash flows and support dividend payments. Further, its growing rate base will likely generate incremental earnings. 

AltaGas remains well-positioned to benefit from the economic reopening and increased energy demand. Its midstream business could continue to benefit from higher export volumes. Further, its focus on cost reduction could continue to cushion its margins. Overall, AltaGas offers good growth and income to its shareholders.

Stock #4: Algonquin Power & Utilities

Similar to AltaGas, Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) offers both growth and income at lower risk. Its high-quality regulated utility assets generate predictable cash flows and drive its dividend payouts. Further, most of its output is contracted, which reduces risk and caps the downside risk.

Its double-digit growth in rate base, power-purchase agreements, and strategic acquisitions will likely drive its adjusted EBITDA and earnings. Furthermore, its growing renewable power business augurs well for future growth. AQN is a Dividend Aristocrat and has grown its dividend at a compound annual growth rate (CAGR) of 10% for the past 11 years. 

Stock #5: Absolute Software

With its low valuation, strong sectoral trends, and robust annual recurring revenue growth, Absolute Software (TSX:ABST)(NASDAQ:ABST) stock is an attractive long-term bet. The cloud-based security platform provider continues to benefit from elevated demand for cybersecurity. 

Meanwhile, its annual recurring revenue (ARR) and adjusted EBITDA growth rate remain strong. Its growing customer base, high retention rate, strategic acquisitions, channel and global expansion, and large addressable market provide a multi-year growth opportunity. Meanwhile, cross-selling and new product launches bode well for future growth and will likely 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 ALTAGAS LTD., Absolute Software Corporation, and BlackBerry.

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