Growth stocks can significantly accelerate your way to financial freedom. However, choosing the right ones to add to your portfolio can be difficult. In some cases, investors can be right about a company but enter a position much too early. In that case, many investors likely wonât stick around long enough to see the major gains that could be had. In other cases, investors may fall for the hype and be completely wrong about a certain stock. In this article, I’ll discuss three growth stocks that investors should hold in their portfolio.
Thereâs no debating the growth of this industry
Regardless of how you look at it, itâs obvious that the e-commerce industry is growing at a rapid pace. Itâs previously been forecasted that the global e-commerce industry could grow at a CAGR of 14.7% from 2020 to 2027. In the United States, e-commerce represented 7.1% of all retail sales in 2011. In 2020, e-commerce accounted for 19.6% of all retail sales. Shopify (TSX: SHOP)(NYSE:SHOP) is one company helping increase the penetration of e-commerce in North America and around the world.
In Q2 2021, Shopify surpassed Amazon in monthly user traffic for the first time. Over that period, Shopify averaged 1.16 billion monthly unique users. That compares to 1.10 billion monthly unique users on Amazon over the same period. Shopify also possesses a continually increasing revenue and a highly invested founder-CEO. These are two qualities that growth investors should look for. Shopify remains a top growth stock in my opinion.
Following a winning playbook
Topicus.com (TSXV: TOI) stock has been struggling as of late, falling about 25% since the end of October. However, since its IPO in February, Topicus stock has gained about 70%. This suggests that the company is actually doing very well, and investors may think that it had previously run up ahead of itself. I firmly believe that this company has a chance to become the next big winner on the stock market.
Prior to its IPO, Topicus was a subsidiary of Constellation Software. Although it now operates as its own entity, Constellation still remains a large influence on Topicusâs day-to-day operations. Six members of the Topicus board of directors are executives from Constellation Software. If Topicus can lean on this vast wealth of experience, it could avoid some crucial mistakes that could hinder its growth. If Topicus can achieve a CAGR that comes close to half of Constellationâs growth rate, investors will be heavily rewarded.
A company helping society see a greener future
Many companies around the world are trying to help facilitate the move to renewable energy. However, that task becomes much tougher if companies arenât able to scale. Brookfield Renewable (TSX: BEP.UN)(NYSE: BEP) has shown that it has the ability to scale. In fact, Brookfield Renewable operates a portfolio of assets capable of producing more than 21,000 MW of power. That makes it one of the largest producers of renewable energy in the world.
Brookfield Renewable is a great stock for investors looking for a mix of growth and dividends. Brookfield Renewable stock has generated an annualized return of 18% since its inception. In terms of dividends, Brookfield Renewable is listed as a Canadian Dividend Aristocrat. Over the past 10 years, the company has grown its distribution at a CAGR of 6%. A top stock suitable for growth and dividend investors alike, Brookfield Renewable should be considered for your portfolio today.
