The correction in the prices of several top Canadian stocks brings an excellent opportunity for investors planning to invest for long-term financial goals like retirement. While several TSX stocks are trading at a discount, investors should focus on the ones with solid fundamentals and the ability to deliver profitable growth.
Against this background, let’s focus on three Canadian corporations that are growing rapidly and have strong profitability, implying their stocks have the potential to help you retire a millionaire.
A fast-growing fashion house
Canadian fashion brand Aritzia (TSX:ATZ) is a compelling long-term bet, and there are good reasons for that. This consumer company is growing its sales and earnings briskly (revenue and earnings per share increased at a double-digit rate since FY18). What stands out is the resiliency of its brand power and ability to attract customers, despite macro headwinds.
Notably, Aritzia’s revenue gained over 48% in nine months of FY23. The company is profitable and managed to grow its bottom line by 22.7% during the same time, despite the cost pressure.
Aritzia stock has witnessed a pullback on fears of an economic slowdown and pressure on consumer spending. However, its stellar financial performance and robust outlook imply that the decline in its price is unwarranted and an opportunity to invest.
It will likely benefit from strong demand for its products, solid mix of full-priced sales, and new boutiques opening in the high-growth U.S. market. Also, the momentum in its e-commerce platform and growing penetration into new verticals augur well for growth. It expects its revenues to increase by a CAGR of 15-17% through 2027. At the same time, its earnings-growth rate is projected to surpass sales. Overall, Aritzia is solid stock to add to your retirement portfolio.
A financial services company
With a market cap of about $2 billion, goeasy (TSX:GSY) is another high-growth stock that should be a part of your retirement portfolio. Despite the recent pullback in its price, shares of this subprime lender have consistently outperformed the TSX and generated significant returns. For instance, its stock has grown at a CAGR of 30% in the past five years, which is encouraging.
goeasy’s outperformance is supported by its fast-growing business that generates robust revenues and earnings. Its top and bottom lines have grown at a solid double-digit rate in the past decade. Moreover, its revenue and earnings increased by 23% and 11% in 2022, despite a challenging macro backdrop.
Thanks to the large subprime lending market and dominant positioning, goeasy sees strong growth ahead on the back of its growing consumer loan portfolio (forecasted to reach $5 billion by 2025). Moreover, leverage from higher revenues and operating margin expansion will drive its bottom line and stock price. Also, investors are likely to benefit from its solid dividend payments.
A leading air cargo company
Like Aritzia and goeasy, Canadian air cargo leader Cargojet (TSX:CJT) has consistently delivered high and profitable growth. Cargojet’s solid domestic network and next-day delivery services to more than 90% of Canadian households provide a solid platform for growth.
Moreover, it will likely benefit from service agreements with United Parcel Service Canada and Canada Post. In addition, long-term contracts with customers, including minimum revenue guarantee and ability to pass through costs, are positives.
The ongoing momentum in its business, opportunities in the international market, and growing e-commerce penetration will likely support its growth. Also, fleet optimization and a focus on driving margins will likely support its bottom line and stock price.