Over the last year, the worsening market environment has created a massive opportunity for investors to buy Canadian growth stocks they can hold for years.
When you find a stock with years of growth potential, the long-term gains could be enormous, and you could even turn a $10,000 investment into $50,000 or even more.
To turn $10,000 into $50,000, investors would have to earn a 400% return on investment. That sounds significant.
But when you invest for the long run and find high-quality stocks that can grow consistently, it becomes much easier and a lot less risky, since you aren’t looking for speculative stocks that can gain 400% in a short period of time.
If you aim to grow a $10,000 investment to $50,000 over a decade, your stocks only need to grow at a compound annual growth rate (CAGR) of 17.45%.
That’s not easy to find, but it’s not impossible. There are plenty of Canadian stocks that have grown at that pace over the last decade and, in some cases, for much longer.
If you’re looking for high-potential Canadian growth stocks to buy for your portfolio, here are three of the best to consider today.
A top Canadian healthcare tech stock
There’s no doubt that one of the best Canadian growth stocks you can buy today is WELL Health Technologies (TSX: WELL), even after its recent rally.
Since the start of the year, WELL has rallied by over 53% compared to the TSX, which has gained just 2%. Despite this incredible performance, though, WELL is still trading more than 50% below its average analyst target price of $9.35, showing just how cheap it is.
Plus, over the longer term, WELL has a tonne of potential with its well-diversified portfolio of telehealth business, digital health apps, as well as physical clinics.
The stock has proven time and again that it can make value-accretive acquisitions and invest in businesses that have considerable organic growth potential.
It’s no surprise that after growing sales by over 87% in 2022, it’s expected to increase revenue by another 15% in 2023. More importantly, though, it’s expected to increase its free cash flow by just shy of 40% this year, as it becomes more profitable.
Therefore, while you can buy WELL when it’s still cheap, it’s one of the best Canadian growth stocks to consider adding to your portfolio.
A high-potential growth-by-acquisition stock
Another incredible Canadian growth stock that you can buy now and potentially hold for years is Neighbourly Pharmacy (TSX: NBLY).
Neighbourly owns and operates pharmacies across Canada. Its strategy is to acquire independent operators to add to its portfolio and increase its footprint across the country.
The more pharmacies it owns, the more it can scale costs. Furthermore, the more brand loyalty it can build. Plus, owning pharmacies is a highly defensive industry, since healthcare as well as medication is so essential.
This strategy is similar in many ways to Alimentation Couche-Tard, a convenience store owner-operator that has grown primarily by acquisition over the years. And over the last decade, Couche-Tard has earned investors a total return of 609% — a CAGR of 21.6% — so there’s a tonne of potential for Neighbourly to grow your capital significantly.
In fiscal 2022, Neighbourly grew sales by 40%, and in fiscal 2023, it’s estimated to grow sales by a whopping 77%. If you’re looking for high-quality Canadian growth stocks to buy now, Neighbourly is one of the best there is.
One of the best Canadian growth stocks to buy today
In addition to Neighbourly and WELL, CAE (TSX: CAE) is another high-quality Canadian growth stock that you have to check out.
CAE provides simulation training in civil aviation, defence and security, and healthcare segments and has operations all over the world. Prior to the pandemic, civil aviation was its largest segment, so the stock was understandably hit by the pandemic.
Now that it can recover, though, and after it’s grown sales in its two other segments over the last few years, CAE is back on track for significant growth potential. In fiscal 2023 alone, it’s expected to increase sales by 23%.
If you’re looking to take advantage of this environment and buy top Canadian growth stocks, CAE is worth considering.
