Canadians are lucky because there are many outstanding companies that trade domestically. For example, WELL Health Technologies (TSX:WELL) and Docebo (TSX:DCBO) have both been named as rising stars in the Canadian stock market. Although they operate in very different industries, both could serve your portfolio in a similar way. That would be by providing a bit of growth potential to your portfolio.
Because of the overlapping nature of these two assets, I don’t think it would be wise to invest in both, depending on the size of your portfolio. In this article, I discuss which stock I think could be the better buy in March 2023.
Background on these two companies
WELL Health, as its name suggests, operates within the healthcare industry. The meat and potatoes of this business is its online services. This includes virtual healthcare and electronic medical records services. Currently, more than 2,500 clinics are supported by WELL Health. In addition, this company also operates 85 clinics across North America. Finally, WELL Health operates an online marketplace that offers software solutions used by healthcare providers to help bolster their virtual health offerings.
Docebo, on the other hand, operates in the enterprise space. It offers an AI-powered and cloud-based eLearning platform to enterprises. Using its software, managers can more easily assign, monitor, and adapt employee training programs. Per its most recent earnings presentation, more than 3,200 businesses use Docebo’s platform. That includes some of the most well-known names in the world like Amazon.
Looking at the numbers
In Q3 2022, WELL Health reported record revenues of $146 million. That represents a year-over-year increase of about 47%. It’s important to note that that growth has mostly been generated organically. This indicates that WELL Health’s current users are finding value in its offerings and have been scaling their operations with more services offered by WELL Health.
Another interesting point is that WELL Health’s virtual health services organically grew by 75%. This suggests that WELL Health could be emerging as a bona fide player in a very competitive space. With those successes in mind, it only makes sense that WELL Health stock has climbed nearly 60% since the start of the year.
Shifting focus on Docebo, investors can also see strong growth in its financials. In Q3 2022, the company reported a 40% increase in its annual recurring revenue. That’s very promising considering the company heavily relies on those recurring payments. Docebo has also been able to lower its cash burn over the years, which is something that investors should really keep an eye on when it comes to growth stocks.
Despite those successes, Docebo stock hasn’t been the best performer this year. Gaining only about 4%, Docebo stock leaves a lot to be desired.
Which is the better buy?
Both of these stocks operate in spaces that could see a lot of growth in the coming years. In addition, both companies continue to post impressive financials. However, WELL Health appears to have a lot more support from investors today, which makes it the far more attractive stock in the short term. If you’re looking for a growth stock to buy in March 2023, I would suggest taking a close look at WELL Health Technologies.