1 of the Top Canadian Growth Stocks to Buy in February 2023

Many top Canadian growth stocks represent strong underlying businesses, healthy financials, and organic growth opportunities.

| More on:
Growing plant shoots on coins

Image source: Getty Images

Every investor may have a different definition of a top stock and hence, a different pool of “top stocks” for every market they invest in. Investors that are interested mainly in passive income lean more towards dividend stocks. Investors aiming to build a hands-off portfolio may be interested in stocks that offer a powerful mix of stability, growth, and dividends.

Then there are investors who wish to grow their savings to a decent-sized nest egg as early as possible. These investors are naturally interested in powerful growth stocks, which require a more active investing style. But there are exceptions — i.e., growth stocks that have grown consistently for several years and may continue to do so.

Boyd Group Services (TSX:BYD) is one such stock, and it deserves to be on your radar for Feb. 2023.

The company

The Winnipeg company has been around since 1990. It started as a single autobody collision repair facility that started growing in Western Canada in under a decade and, by 1999, was a leader in this space in Canada.

It started growing its U.S. footprint and now has over 867 collision repair locations in two countries. There are now five different brands under the Boyd name, including a claims processing business.

Thanks to a few well-placed acquisitions, Boyd’s U.S. presence now far outshines its local one. Only about a 10th of the company’s revenue comes from Canada now. Over 700 of its 867 locations are spread out over 31 U.S. states.

It’s a mature business with a strong financial footing. The fact that almost 90% of its revenues come from insurance companies and only 10% from consumers makes its revenue stream relatively secure against market fluctuations.

The stock

If you had invested $10,000 in Boyd Group exactly 15 years ago, you would have grown your capital to a massive nest egg of about $900,000 or over a million with dividends reinvested. That was the golden time of Boyd’s growth, but that doesn’t mean it’s not worth considering now. Its post-2020 crash performance endorses its potential as a decent growth stock.

After the crash, the stock recovered almost all of its value in just under four months. Then it rose at a modest pace, only to be pushed down 50% from its Oct. 2021 high. The company has gone through a steady recovery phase and has risen 68% so far.

This rate is comparable to its growth before the pandemic, and if it keeps on going up at this rate for a decade or so, you may grow your capital by a significant margin. The company pays a dividend, but the current yield of 0.27% is too small to be consequential for your investment decision.

Foolish takeaway

If you are a little late to your retirement planning and only have one or two decades to grow whatever savings you have to a decent size, stocks like Boyd may be your best shot. With the right combination of growth stocks, you may be able to achieve anywhere between two- to five-fold growth within a decade, even taking the underperformers into account.

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 Boyd Group Services. The Motley Fool has a disclosure policy.

More on Dividend Stocks

retirees and finances
Dividend Stocks

Retirees: 3 Ideal Stocks to Buy in a Bearish Market

Given their low-risk businesses and stable cash flows, these three Canadian stocks are ideal buys for risk-averse retirees.

Read more »

data analyze research
Dividend Stocks

3 Dividend Powerhouses to Buy for Reliable Passive Income

Are you seeking passive income? These three Canadian stocks are reliable investments for generate steady income.

Read more »

dividends grow over time
Dividend Stocks

For a Shot at $6,000 in Yearly Passive Income, Buy These 2 TSX Stocks

Canadian investors can make some nice passive income from parking money they don't need for a long time in high-yield…

Read more »

Man making notes on graphs and charts
Dividend Stocks

2 No-Brainer TSX Stocks to Buy (Especially if There’s a Market Correction)

No matter what is happening in the stock market, these two blue-chip stocks could be reliable investments to own.

Read more »

money cash dividends
Dividend Stocks

1 of the Smartest Stocks to Buy for Dividends and Share Repurchases in 2023

Dividend stocks like Power Corp of Canada will have an excellent year.

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

3 Canadian Dividend Stocks I’d Buy Hand Over Fist This Month

Three high-quality dividend stocks can overcome the current headwinds and negative market sentiment in March 2023.

Read more »

Happy diverse people together in the park
Dividend Stocks

TFSA: 2 Stocks to Create Lasting Generational Wealth

Stock investing can help Canadians accumulate and grow generational wealth that they can pass on to their children and grandchildren.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Sitting on Cash? Invest $20,000 in This Dividend Stock for $96,588 in 10 Years

This top dividend stock has quadrupled in share price in just a decade, and that could very well happen again!

Read more »