Assuming all three companies repeat the growth of the last 10 years in the next decade, TFI International (TSX:TFII) and Open Text (TSX:OTEX) may surpass Power Corporation of Canada (TSX:POW) in market value by the end of this decade.
TFI International and Open Text are already at the minimum market cap threshold for large-cap stocks and may push deeper into the territory if they keep growing at the same pace as they have been.
Currently, both companies have a market capitalization significantly lower than the reference company, especially Open Text. But even if we assume that Power Corporation will also grow about 33% (as it did in the last 10 years) to over $26.5 billion in market value, the two smaller companies can still surpass it, thanks to the significantly stronger growth potential.
A logistics company
TFI International has grown from a small trucking company in 1957, primarily operating in Quebec, to the largest trucking company in Canada. It has a massive fleet, over 11,800 drivers, and an impressive network of facilities (over 550 locations). There are over 80 operating companies under the TFI banner.
The stock showed enormous potential, especially after the Great Recession, and grew over 1,100% between 2009 and 2020. This powerful pre-pandemic growth in a healthy market is what endorses the notion that the company may have the potential to rise to the $26.5 billion market cap mark in the next decade.
However, the bulk of the most recent growth occurred post-pandemic, pushing the value up by over 200% in fewer than three years.
The current market value of the company is $12.5 billion, and it has grown by about 660% in the last 10 years. Even if it underperforms and achieves half the growth it did in the last decade, a strong possibility considering the significant impact of a solid post-pandemic market, it may still be worth more than the Power Corporation of Canada by 2032.
A tech company
Open Text is a relatively modest grower compared to TFI International, but it’s still a promising contender for a company that may be worth more than Power Corporation of Canada in a decade’s time. Open Text is built around information management systems and associated cloud-native solutions. It has built an impressive portfolio of clients over the years, including Hyatt and AMD.
Up until the pandemic, the stock had experienced decent and relatively steady growth. Even in the post-pandemic market, when many tech stocks grew unnaturally fast and then had to go through a brutal correction phase, the stock was growing almost at its former pace.
Unfortunately, even though Open Text wasn’t with the rest of the sector in the unprecedented growth, it did suffer along during the correction phase and is still trading at over 40% discount.
With that taken into account, the 10-year growth is still impressive — 186% in the last decade. That would be enough to push the current market value of the company beyond the $26.5 billion mark.
Foolish takeaway
The two companies can be powerful growth catalysts within your portfolio. Open Text is currently heavily discounted and may recover with the sector. TFI International’s fair valuation indicates that it may continue to grow in a healthy market instead of going into correction mode for its post-pandemic growth.
