The stock market correction in 2022 has been scary. It has a been a sustained correction for almost six months. Given all the fears in the world, there are still plenty of reasons to be pessimistic.
The only way to battle this fear as an investor is to think long term. If you are worried about current market volatility, you may, in fact, be a speculator, not an investor. A speculator buys and sells stocks based on the day-to-day or month-to-month market reactions.
An investor buys a share in a real business and holds it for long-term value creation. If it is a great business with strong tailwinds for growth, it has a high chance of creating wealth. However, this strategy needs time, and lots of it.
If you are an investor and looking for stocks to own for decades, here are three that could be big winners in the future.
Stock #1: Descartes Systems
Descartes Systems (TSX: DSG)(NASDAQ: DSGX) operates one of the world’s largest logistics networks. It complements its network with a wide array of transportation and logistics-focused software services. If you consider all the global supply chain challenges, demand for its streamlining services has accelerated.
This is a very profitable business. It earns +40% EBITDA (earnings before interest, taxes, depreciation, and amortization) margins and +23% profit margins. The company generates a lot of spare cash, which it regularly deploys into smart acquisitions.
This stock is very pricey at 27 times EBITDA. However, you must pay up for its high-quality platform and consistent business model. Given its strong history of 27% compounded annual total returns, this is a nice growth stock to hold for the very long term.
Stock #2: Brookfield Renewables
If you are looking for some growth and a nice dividend income, you might want to think about Brookfield Renewable Partners (TSX: BEP.UN)(NYSE: BEP). It is one of the world’s largest pure-play renewable power companies. It has highly prized hydro-power assets that are complemented by wind, solar, battery, and distributed generation assets across the globe.
Energy security and climate change are becoming extremely pressing issues. Brookfield is postured to help by financing and developing huge renewable projects around the world. Today, the company produces around 20,000 megawatts of power. It has a development pipeline that is three times that size.
That should help fuel many years of growth ahead. While investors wait, they can collect an attractive and growing dividend yield of 3.3%.
Stock #3: Cargojet
Cargojet (TSX: CJT) has a long history of delivering very strong shareholder returns. Over the past decade, it has earned a 2,147% total return (36.3% annualized)! In that time, it has become a dominant overnight freight carrier in Canada. It has enviable contracts with the likes of DHL, Canada Post, and Amazon.com.
The stock is down 10% this year due to costs pressuring profits. While this is a temporary worry, Cargojet has been doing a great job of stealing air freight market share from passenger carriers.
It is also expanding its services internationally by adding several new airplanes to its fleet. This could be a new major opportunity for growth. With the stock trading at a multi-year low valuation, now may be a perfect time to step in for the long term.
