2 Stocks That Could Be Worth More Than Power Corporation of Canada by 2032

Fast-growing stocks may have the potential to overtake relatively slower stocks in a decade, even if the current difference is significant enough.

| More on:
Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept

Image source: Getty Images

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.

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 Advanced Micro Devices. The Motley Fool has a disclosure policy.

More on Investing

A shopper makes purchases from an online store.
Tech Stocks

2 E-Commerce Stocks That Could Boost Your Wealth in 2023

E-commerce stocks like Shopify (TSX:SHOP) could increase your wealth in 2023.

Read more »

Dividend Stocks

3 Canadian REITs That Pay Out Every Month

$10 can buy you a stake in a REIT that pays monthly distributions yielding 8.2% annually. CT REIT and another…

Read more »

Modern buildings in business district
Dividend Stocks

2 Top Residential REITs to Buy in February 2023

These two top residential REITs to buy offer attractive passive income as well as long-term growth potential.

Read more »

A meter measures energy use.
Dividend Stocks

3 Reasons to Buy Utility Stocks in 2023

Here's why adding utility stocks to your portfolio is a smart idea, as we face significant uncertainty in 2023.

Read more »

A close up image of Canadian $20 Dollar bills
Investing

3 Cheap Canadian Stocks to Buy Under $20

Cheap stocks under $20 like WELL Health Technologies (TSX:WELL) should be on your watch list.

Read more »

Oil pumps against sunset
Energy Stocks

Vermilion Energy Stock Is Down 50% From Its High: Is It a Bargain Buy Today?

TSX energy stocks have had a positive start in 2023, while VET stock has been consistently weak.

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Dividend Stocks

TFSA Passive Income: Earn $129/Month Tax Free

Do you seek passive income? Leverage your TFSA to earn tax-free passive income via these Dividend Aristocrats.

Read more »

Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance
Dividend Stocks

TFSA Investors: Make $102/Month Without Lifting a Finger

Here’s an amazing monthly Canadian dividend stock that can help TFSA investors earn reliable passive income for years.

Read more »