The global market has still not recovered from the bloodbath that took place last year. There are still concerns about high inflation, recession, and the impact of Fed interest rate hikes. So, it might be a bit difficult for investors looking for positive gains, given the lingering risks and not-so-favourable environment. However, one of the best strategies in this situation may be to invest in growth stocks.
While the chances of the impressive gains we saw in previous bull markets may not be the same, in the long run, investors in the highest-quality growth stocks tend to outperform. For those looking for the best options right now, here are two great growth stocks I think fit the profile of investors with a medium risk tolerance.
Top growth stocks: Restaurant Brands
One of the most popular and largest fast-food chains worldwide, Restaurant Brands (TSX: QSR) may not be the first company many investors think of as a top growth stock. That said, this company’s world-class brands, which include Burger King, Tim Hortons, Popeyes, and Firehouse Subs, is certainly a company with an impressive growth trajectory. Indeed, the company’s 15% year-over-year revenue growth is a testament to this view.
The majority of this increase came from growth in Burger King’s International segment. Additionally, the company’s net income growth of 61% year over year makes a strong fundamental case for investors to own this stock over the long term. Many analysts believe that the stellar performance of QSR stock could lead to a stock price around $100 per share. Personally, I think this stock could have much more upside than this.
That’s because this is a defensive growth stock many investors will want to stick with in times of uncertainty. Given the potential for a recession on the horizon, Restaurant Brands is a stock I want in my corner. This company could actually see sales growth in a difficult market, as diners trade down to fast food in times of trouble.
Boyd Group
Boyd Group (TSX: BYD), along with its subsidiaries, operates collision repair centres in North America. The company saw a significant rise in its stock price in recent months, reaching a high of $219 per share. Having settled down around the $203 level at the time of writing, this is a stock I think could trade much higher over the medium term. That’s because I view this company as undervalued with excellent long-term growth prospects.
Boyd’s long-term growth outlook remains strong. As a key consolidator of a fragmented sector, Boyd has grown via acquisitions over time. Thus, one of the key driving components of the company’s growth rate is its deal flow.
Given the massive potential market size for Boyd to continue its consolidation roadmap in North America alone, I think this company is in good shape to continue to provide the long-term capital gains investors are used to. In addition, the company declared that it would increase its modest dividend last month, on Jan. 27. This increase brings the company’s dividend to just under 15 cents per share (yeah, that’s really nothing for a company of this size, but it’s something).
Bottom line
Both Restaurant Brands and Boyd Group are two growth stocks I think long-term investors ought to consider right now. Given the uncertainty prevalent in the market, these are stocks I think can provide decent returns over a five- or 10-year period moving forward.
