One of the most common mistakes that investors make is to focus on what stocks are hot now and have momentum in the short term. Instead, you are much better off finding the best businesses that can outperform for decades. These will be the best Canadian stocks to buy.
When you can find a high-quality company that enjoys significant competitive advantages over its peers and operates in an industry that will allow it to continue to grow for several years, these investments have the opportunity to drive significant portfolio growth.
So with that in mind, if you’re looking to add some stocks to your portfolio, here are two of the best Canadian growth stocks to buy now.
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A top health care tech stock
There’s no question that WELL Health Technologies (TSX:WELL) is one of the top long-term Canadian growth stocks to buy. But considering how cheap it’s been lately, it’s one of the very best to buy now.
The company has built a high-quality portfolio of health care businesses that complement each other well. It started with physical health care clinics and a high potential technology portfolio. And in the last few years, that portfolio has grown rapidly by acquisition.
What’s so impressive about WELL, though, is that many of these acquisitions it’s made have tonnes of organic growth potential themselves.
So while WELL is predominantly a tech stock, the fact that it operates in and is disrupting the health care industry means that it offers investors significant growth potential for decades, which is why it’s one of the best Canadian stocks to buy.
And as I mentioned above, because it’s undervalued today, trading at a forward enterprise value to sales ratio of just 2.7 times, and a discount to its average analyst target price of more than 50%, it’s unquestionably one of the best Canadian stocks to buy today.
One of the best Canadian green energy stocks to buy and hold for decades
If you’re looking for high-quality growth stocks that you can own for years, it makes sense that green energy is one of the best industries to find investments in.
And while there are numerous high-quality Canadian green energy stocks to buy, one of the best has to be Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP).
Brookfield has a massive portfolio of renewable energy assets. In fact, it’s one of the largest publicly traded green energy companies in the world.
And not only is its portfolio large, but it’s well-diversified, owning hydroelectric assets, wind, solar, and even storage facilities. In addition, it’s diversified all over the world, with businesses in North and South America, Asia, and Europe.
Because green energy offers investors a decades-long opportunity, it makes sense that the best Canadian stocks to buy will be ones that can consistently perform over the long haul. And Brookfield has proven to do just that.
Furthermore, in addition to all the long-term potential it offers, it also has a tonne of opportunities to expand its assets and the funds from operations (FFO) its portfolio generates in the short term.
Management is already expecting to grow its FFO per unit organically at a compounded annual growth rate CAGR of 6%‒11% over the next five years. This is crucial because growth in FFO is what ultimately drives increases in the distribution each year.
Furthermore, this is the potential for growth before any acquisition activity, and typically Brookfield targets at least $1 billion in acquisitions each year.
So it’s clear that Brookfield continues to execute well, has an incredible portfolio of assets, and is one of the best Canadian growth stocks to buy for the long haul.
