3 Canadian Stocks With a Legit Chance of Making You a Millionaire

Growth stocks, including battered but quality tech stocks, could help you on your path to becoming a millionaire.

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Here’s a group of growth stocks that could potentially produce tremendous wealth for investors over the next decade. If you invest enough money in these types of stocks, you have a legitimate chance of becoming a millionaire!

Nuvei stock

Nuvei (TSX:NVEI) stock took a beating, falling as much as 80% last year versus its peak in 2021. From the low in December, the stock has rallied about 60%. Nuvei also has reasonable debt-to-equity and debt-to-asset ratios of about 78% and 44%, respectively. It has hopes of a continued turnaround.

Despite slower growth compared to previous years, Nuvei still managed to deliver growth in 2022, which is very impressive in a higher interest rate and higher inflation environment. Specifically, in 2022, it increased revenue and gross profit by about 16% to $843.3 million and $671.9 million, respectively.

Unfortunately, operating expense bumped up by 38% to $592.1 million. Particularly, selling, general, and administrative costs climbed 45% to $496.6 million. Consequently, operating income came in 46% lower, year over year at $79.8 million. It still fared better than a lot of tech companies of around its size, because, ultimately, it was still profitable last year with net income of $56.7 million.

Constellation Software stock

Constellation Software (TSX:CSU) is another fabulous tech stock that could make long-term investors super wealthy. In fact, the top-notch growth stock has turned investors into millionaires. For example, an investment of $10,000 in CSU stock from 2007 is worth about $1,124,883 today! This equates to a return of about 34% per year.

Notably, over this period, the company increased its earnings per share by almost 52 times! As well, its price-to-earnings multiple expanded from about 20 to 34 times earnings. Of course, by the present day, Constellation Software is well recognized as a quality tech stock. This is why it commands a high valuation.

At $2,310 per share at writing, analysts believe the stock trades at a discount of 11%. So, it could still deliver good returns over the next decade. However, don’t expect the returns to be as crazy as they were in the past.

Kinaxis stock

After falling from its all-time high in 2021, Kinaxis (TSX:KXS) stock seems to have consolidated. If it breaks above $170, it could revisit $200 over the near term. In fact, analysts currently have a 12-month consensus price target of $219.40 on the stock. This implies near-term upside potential of 31%.

Kinaxis’s debt-to-equity and debt-to-asset ratios are about 61% and 38%, respectively. Its debt ratios are relatively low versus many other tech companies. This should give it greater financial flexibility to fund future growth.

Its revenue growth of 46% in 2022 is also quite good versus the tech sector. Gross profit growth was about 44%. Operating income came in at US$27.9 million, while net income was US$20.1 million.

Investor takeaway

While these tech stocks look ripe for more upside, investors should size their positions appropriately. These holdings are probably best to facilitate portfolio growth, supporting core holdings in a diversified portfolio.

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 Kay Ng has position in Nuvei. The Motley Fool has positions in and recommends Nuvei. The Motley Fool recommends Constellation Software and Kinaxis. The Motley Fool has a disclosure policy.

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