Investors planning to invest to meet long-term financial goals like retirement should capitalize on the pullback in prices of several top Canadian stocks. As stocks are inherently risky, one should focus on corporations that have strong fundamentals, have been growing rapidly, and are profitable. Also, those companies should have multiple catalysts to support future growth. This way, investors can create a winning long-term portfolio that could outperform the broader markets by a considerable margin.
In this article, I’ll focus on three stocks that could help you retire rich.
goeasy
Speaking of profitable high-growth stocks, one could consider investing in goeasy (TSX:GSY). This subprime lender has grown its adjusted EPS (earnings per share) at a CAGR (compound annual growth rate) of 29.1% from 2011 to 2021. Meanwhile, in the first nine months of 2022, goeasy’s adjusted EPS increased by 11%.
goeasy’s strong profitability is supported by its stellar sales and steady credit performance. Its asset quality remains strong, which reduces credit risk. Moreover, the lender benefits from higher loan originations that drive its loan portfolio. It’s worth highlighting that goeasy’s credit and payment performance remained stable in the first nine months of 2022 despite the weak macro environment. Further, its allowances for credit losses decreased slightly, reflecting improved product and credit risk.
Thanks to its solid earnings base, goeasy stock gained significantly over the past decade and generated multi-fold returns. Furthermore, it enhanced its shareholders’ returns through higher dividend payments. GSY stock has witnessed a pullback amid fears of an economic slowdown, providing a solid buying opportunity for investors.
Aritzia
Like goeasy, Aritzia (TSX:ATZ) has also delivered stellar growth and is highly profitable. For instance, its adjusted net income has grown at a CAGR of 24% from fiscal 2018 to 2022. Year-to-date in fiscal 2023, it has increased by 22.7%.
Strong demand and full-price selling support its top line. Also, product expansion, new boutique openings, and omnichannel strength are accelerating growth. Meanwhile, its growing revenues and operating efficiency drive its earnings.
This consumer company is strategically expanding its boutiques in high-growth markets like the United States. Further, it is growing its penetration into other verticals, which will likely support sales. The company expects its top line to increase at an average annualized rate of 15–17% over the next five years. What stands out is that management forecasts EPS growth to be higher than the sales growth rate. Overall, Aritzia is poised to deliver stellar growth, which will drive its stock price higher.
Cargojet
The final stock on this list is Cargojet (TSX:CJT). Canada’s leading air cargo service provider is known for delivering solid sales and earnings. For instance, Cargojet’s revenues increased 36.6% in nine months of 2022. This growth came despite the slowdown in the e-commerce vertical. Meanwhile, its adjusted EPS jumped 56.7% during the same period.
Its next-day delivery services to more than 90% of Canadian households, service agreements with Canada Post and United Parcel Service Canada, long-term contracts with minimum revenue guarantee, and ability to pass-through costs augur well for growth.
Overall, Cargojet is well-positioned to benefit from both a strong domestic network and opportunities in the international market. As the e-commerce sector and thus revenues recover, fleet optimization could continue to boost profitability and support its stock price.
