3 Linear Growth Stocks for Predictable Wealth Building

Long-term linear growth stocks usually come with a higher valuation, but that’s a small price to pay for predictability and decent return potential.

| More on:
grow dividends

Image source: Getty Images

When you are building your wealth over time, predictability is a very desirable element to go for in your portfolio. If you know (with reasonable leeway) how much your portfolio will grow in a year on average and what the total dividend-based returns will be, you will have an adequately accurate idea of whether you are on track with your financial goals or not.

To that end, there are three linear growth stocks that you should consider investing in.

A heavy equipment company

Toromont Industries (TSX:TIH) has a well-defined competitive edge. The company (technically, one of its divisions) is one of the largest CAT equipment dealers in the world. And it has built on this edge and diversified its equipment operations. Its second business segment (CIMCO refrigeration) has little overlap with the equipment side and has its own distinct and financially diverse presence.

The stock has been a steady, linear grower for some time now, and even though it experienced slightly more expedited growth post-pandemic, the pattern didn’t change too much from its pre-pandemic growth. Its 10-year compound annual growth rate (CAGR) of 19% could help you more than double your capital in half a decade, so the pace of wealth-building would be just as impressive as its predictability.

Engineering professional services company

If you are looking to invest in future-facing professional services and consultancy company, WSP Global (TSX:WSP) is a great option to consider. The company is headquartered in Montreal and operates in several countries, though the bulk of its revenue is generated from five countries: the U.S., Canada, U.K., Sweden, and Australia. From a market segment perspective, most of the company’s revenue comes from transport and infrastructure services.

WSP stock has been eerily consistent for at least a decade, and it’s almost always growing. The only stagnant patch the stock saw was 2020 when the stock didn’t pick up the pace till December, and in 2021, it grew per its usual pace. The value, while high, is almost a bargain if the company can keep up its magnificent 10-year CAGR of 23.9%.

An alternative financial company

Goeasy (TSX:GSY) stock has primarily gone in one direction since 2011, i.e., up. While there have been some falls along the way, the overall growth pattern and pace have been relatively consistent. One major exception would be the post-pandemic market, when the stock grew and rose too rapidly to be in sync with its natural pace.

The stock rose over 640% in about one-and-a-half years and has been in a correction phase since the last quarter of 2021. It has fallen about 41% from its peak, and the pattern is not showing any signs of reversing.

Ideally, the stock would go well below $100, and you should be looking to buy the dip, even if the stock shows stagnation before recovering. Its dividend growth is quite enviable, and if its fall becomes more profound, the yield would also be more attractive.

Foolish takeaway

The three growth stocks are not just predictable in their pattern and pace; they can be powerful additions to your portfolio and really expedite your wealth-building pace. They also add a decent amount of diversity to your investments.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends WSP GLOBAL INC.

More on Dividend Stocks

Dividend Stocks

Rising Interest Rates: Opportunity or Threat for Canadian Real Estate Investors?

Where real estate prices will go depends on the supply-demand dynamic in the industry as well as where interest rates…

Read more »

Increasing yield
Dividend Stocks

High-Yield Investors: Should You Buy TC Energy Stock Now?

TC Energy is off the 2023 lows. Is more upside on the way for TRP?

Read more »

Construction work on a site
Dividend Stocks

3 Top Infrastructure Stocks to Buy on the TSX Today

Three TSX infrastructure stocks that outperform in 2023 are well positioned to deliver fatter gains in the coming years.

Read more »

The sun sets behind a high voltage telecom tower.
Dividend Stocks

My 2 Favourite TSX Utility Stocks for December 2023

While typically seen as boring, utility stocks can be excellent for safe dividend income. Here are two of my favourite…

Read more »

Dividend Stocks

How to Make $1,000/Year With Enbridge Stock

Enbridge’s unwavering commitment to maintaining and increasing its dividend makes it a top passive-income stock.

Read more »

Dividend Stocks

2 Top Telecommunication Stocks to Buy on the TSX Today

Two telco stocks, but not the dominant industry players, are buying opportunities on the TSX today.

Read more »

worry concern
Dividend Stocks

Is Now Actually the Right Time to Buy BCE Stock?

Looking for a great stock to buy at a serious discount? It’s the right time to buy BCE (TSX:BCE) stock…

Read more »

question marks written reminders tickets
Dividend Stocks

Up 10% in a Month, Is Loblaw Stock a Buy?

Loblaw stock (TSX:L) has seen a strong increase in share price in the last month, but could more be on…

Read more »