1 of the Top TSX Growth Stocks to Buy Right Now

Here’s why Boyd Group (TSX:BYD) is one of the best growth stocks long-term investors should consider in this upside-down market right now.

| More on:
Upwards momentum

Image source: Getty Images

The Canadian stock market has actually held up quite well, despite a rocky 2022. The energy- and financials-heavy composition of the TSX resulted in a decline of only 6% during the past year. However, the market is expected to grow decently in 2023, as per many analysts.

Indeed, 2022 was not a great year for growth stocks. Many investors abandoned faith in high-growth companies as a result of central bank tightening and fears of a looming recession. Thus, the transition toward value and away from growth stocks is one that has led value investors to outperform their growth counterparts for the first time in a while.

That said, these broad-based declines have improved the valuation metrics of many growth stocks, resulting in an interesting setup in 2023. One top growth stock I think is worth considering given this backdrop is Boyd Group (TSX:BYD). 

Here’s why.

BYD stock has bright potential ahead 

Taking a look at the chart above, it’s clear that Boyd hasn’t seen the drop-off many of its growth peers have. That’s for good reason.

This is a company that’s continued to see its valuation surge at a rate that exceeds the market for a very long time. The company’s approximate doubling of value over the past five years (excluding dividends) is notable. And that’s with earnings per share that have actually declined on a year-over-year basis.

The reason for this stock price outperformance is consensus expectations around forward growth. Wall Street projections see BYD stock growing annual earnings in the 65% range for the coming year. So long as the company remains on its longer-term growth trajectory, this is a stock that’s likely to continue moving higher.

Bottom line 

Boyd is among the leading growth stocks I think is worthy of consideration in this difficult market. As a leading purveyor of glass and collision repair shops in North America, the thesis is simple. More people means more cars on the road. And with the pandemic in the rear-view mirror, this thesis holds water more than ever.

As Boyd continues to consolidate this fragmented industry, I think more upside could be on the horizon. This is a company that funds most of its acquisitions through the cash flow of its underlying businesses. Thus, so long as Boyd can continue to deliver outsized returns, its share price should remain on this trajectory. It’s one of the top growth stocks on my watch list right now for this reason.

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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Boyd Group Services. The Motley Fool has a disclosure policy.

More on Investing

Target. Stand out from the crowd
Dividend Stocks

RRSP Pension: 2 Dividend Stocks to Buy on the Latest Dip

These high-yield TSX stocks look cheap right now for RRSP investors.

Read more »

bulb idea thinking

The Smartest TSX ETF to Buy With $1,000 Right Now

Forget the TSX 60 or the TSX Composite. I prefer the TSX Dividend Aristocrats.

Read more »

Canada Day fireworks over two Adirondack chairs on the wooden dock in Ontario, Canada

CPP Benefits Not Enough? This Top Dividend Stock Can Help Fund Your Retirement

Canadian retirees can look to supplement their CPP payout with quality dividend stocks such as Headwater Exploration.

Read more »

grow dividends
Stocks for Beginners

Why Cargojet Stock Is Surging Past 52-Week Highs

Cargojet (TSX:CJT) stock surged by 17% after a new deal was announced, with upgrades coming in as well for the…

Read more »

protect, safe, trust

It’s Time to Defend Your Wealth: 3 Top Stocks to Help Keep What’s Yours

For those looking to defend your wealth against what appear to be robust oncoming macro headwinds should consider these stocks.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

Safe and Sound Stocks for Canadians: My Top 5 Choices

Five safe stocks to buy on a market pullback.

Read more »

Financial technology concept.

Couche-Tard Stock: Today Is a Huge Buying Opportunity

Alimentation Couche-Tard (TSX:ATD) stock looks like a steal after its latest unwarranted plunge into a correction again.

Read more »

A stock price graph showing growth over time
Metals and Mining Stocks

Why Cameco Stock Soared 23% This Year

Cameco stock continues to ride high on strong supply/demand fundamentals and growing momentum in the nuclear industry.

Read more »