Buy These 3 Growth Stocks With Multi-Fold Return Potential

Given their high-growth prospects and attractive valuations, these three growth stocks are excellent buys for long-term investors.

| More on:
grow money, wealth build

Image source: Getty Images

The global equity markets have been on a roller-coaster ride this year, creating challenges, even for experienced investors. If you are new to investing, there is no need to get boughed down by the volatility, as stocks with solid fundamentals tend to bounce back strongly to deliver superior returns in the long run. So, if you are a long-term investor, here are three high-growth stocks that have the potential to provide multi-fold returns over the next 10 years.

Nuvei

With the growth in e-commerce and internet penetration, digital payments are growing. Meanwhile, Markets and Markets project the segment to grow at a CAGR (compounded annual growth rate) of 13.4% through 2026. Amid the expectation of double-digit growth in its addressable markets, I have selected Nuvei (TSX:NVEI)(NASDAQ:NVEI), which supports over 570 APMs (alternative payment methods) in more than 200 markets, as my first pick.

The company reported a solid second-quarter performance earlier this month, with its total volume increasing by 38% to $30.1 billion. Its revenue and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) grew by 43% and 40%. Amid the rising demand, the company is expanding its product portfolio, venturing into new markets, expanding its APM portfolio, and introducing its payment solutions to new markets and segments, which could drive its growth.

After reporting its second-quarter earnings, Nuvei has lowered its guidance for this year. However, it has maintained its medium- and long-term targets, with its total volume and revenue projected to grow over 30% annually in the medium term. The company currently trades at a 75% discount from its 52-week high, making it an excellent buy for long-term investors.

goeasy

goeasy (TSX:GSY) has been growing its financials at a healthier rate for the last 20 years. It has delivered returns of over 3,000% in these 20 years at a CAGR of around 19%. Despite the strong growth, the company’s market share stands at just 3%, thus providing substantial scope for expansion in the highly fragmented subprime lending market.

Meanwhile, goeasy is broadening its product range, strengthening its distribution channels, and enhancing customer relationships to drive growth. Given its growth prospects, the company’s management expects its loan portfolio to grow by 69% to reach $4 billion by 2024. The management expects its revenue to grow at a CAGR of 18.5% while delivering a return on equity of above 22% annually.

goeasy has also raised its dividend at a CAGR of around 40% for the last four years. Its yield for the next 12 months stands at 2.5%. Its valuation also looks attractive, with its NTM (next 12-month) price-to-earnings multiple standing at 10.6. Considering all these factors, I expect goeasy to deliver substantial returns over the long run.

WELL Health Technologies

The pandemic and increased penetration of internet services has accelerated the adoption of virtual healthcare services. Meanwhile, analysts expect the segment to grow at a CAGR of around 30% through 2028. Amid the growing addressable market, I have selected WELL Health Technologies (TSX:WELL) as my final pick.

Last week, the company reported a solid second-quarter performance, with its revenue growing by 127% while its adjusted EBITDA increased by 122%. It had an overall 1.16 million patient interactions at an annualized run rate of 4.66 million. After posting its second-quarter results, WELL Health’s management has raised its guidance for this year.

Plus, WELL Health has announced to accelerate its mergers and acquisitions activities. Despite its solid financials and healthy growth prospects, the company’s NTM price-to-earnings multiple stands at an attractive 14.8, making it an excellent buy.

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.

The Motley Fool has positions in and recommends Nuvei Corporation. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

More on Investing

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies
Tech Stocks

Better Artificial Intelligence Stock: UiPath vs. C3.ai

Deciding between UiPath and C3.ai isn't easy since both have strengths and weaknesses.

Read more »

data analyze research
Investing

The 1 Stock to Own in a Sideways Economy

Here's why Restaurant Brands (TSX:QSR) remains a top TSX stock investors shouldn't ignore for long-term gains in this market.

Read more »

Retirees sip their morning coffee outside.
Retirement

Here’s the Average RRSP Balance at Age 65 and 71 in Canada

Canadian investors can consider holding dividend stocks and supplement their CPP and RRSP payouts in retirement.

Read more »

Technology
Dividend Stocks

10 Years From Now, You’ll Be Glad You Bought These Magnificent TSX Dividend Stocks

The TSX is lucrative to buy these magnificent dividend stocks in bulk and be proud of this decision 10 years…

Read more »

sale discount best price
Energy Stocks

Time to Pounce: 1 Phenomenal TSX Stock That Hasn’t Been This Cheap in a While

Now could be the time to get into Cameco (TSX:CCO) stock, which is up 81% in the last year but…

Read more »

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies
Tech Stocks

3 Millionaire-Maker Tech Stocks That Should Be on Your Radar

These three tech stocks have already proven themselves worthy, but have a lot more to prove in the near future.…

Read more »

A close up image of Canadian $20 Dollar bills
Tech Stocks

3 No-Brainer Stocks to Buy With $20 Right Now

These three stocks are easy buys for those who don't have all that much to spend, and want long-term growth…

Read more »

calculate and analyze stock
Dividend Stocks

4 Fabulous Dividend Stocks to Buy in July

Are you looking for long-term income? These four dividend stocks should not only provide you with value in July but…

Read more »