If you plan to invest for long-term financial goals like retirement, now is an excellent time, as top Canadian stocks are trading at a significant discount. However, when investing for the long term, one should focus on the shares of companies with solid fundamentals, a growing revenue base, and a history of delivering profitable growth. Further, investors should focus on diversifying their portfolios to reduce risk.
Against this backdrop, I’ll focus on shares of three Canadian corporations that have been growing swiftly, have solid fundamentals, and are highly profitable. Moreover, these companies have proven business models and have created significant wealth for their shareholders. Thus, adding these stocks to your portfolio could help you retire wealthy and beat the TSX by a considerable margin. Let’s begin.
Cargojet (TSX:CJT) is Canada’s leading air cargo company. With its solid domestic network and next-day delivery capabilities to most Canadian households, Cargojet consistently delivered strong revenue and earnings growth that helped the company to beat the TSX by a wide margin in the past decade.
While macro headwinds have taken a toll on consumer spending, its strategic partnerships with top logistics brands (like UPS, Canada Post, DHL, and Amazon, among others) ensure long-term stability and growth. Also, it diversifies its revenue base.
It’s worth highlighting that Cargojet’s long-term contracts have a minimum revenue guarantee. Also, it has cost pass-through provisions. Impressively, Cargojet has a 100% customer retention rate. All these show that the company is poised to consistently deliver strong organic growth. Moreover, its focus on network and fleet optimization, strength in the ACMI (Aircraft, Crew, Maintenance, and Insurance) segment, and opportunities in the international and e-commerce market bode well for future growth.
With a market capitalization of about $2 billion, goeasy (TSX:GSY) is a solid long-term mid-cap stock to create wealth. Macro headwinds and the recent concerns surrounding the banking and lending market have weighed on goeasy stock. However, this pullback is an excellent opportunity to invest in a company that has been growing its revenue and earnings at a stellar double-digit rate.
Despite challenges, goeasy is witnessing strong growth in its loan originations, which will likely drive its future revenues and consumer loan portfolio. Further, a large subprime lending market offers ample growth opportunities.
Leverage from higher sales, stable credit performance, and operating efficiency will likely cushion its earnings and dividend payments. goeasy is a part of the S&P/TSX Canadian Dividend Aristocrats Index and a dependable growth and income stock.
Aritzia (TSX:ATZ) is the final stock on this list. Despite the pressure on consumers’ discretionary spending, this fashion house has managed to attract customers, which is reflected through double-digit growth in its top and bottom lines.
Aritzia expects its revenues to increase by about 15-17% annually through 2027. Further, the company expects to grow its earnings faster than revenues.
Its upbeat guidance, a favourable mix of full-priced sales, expansion of the boutiques, and strengthening of its e-commerce platform augurs well for long-term growth. Further, Aritzia stock is trading at a forward price-to-earnings ratio of 20.1, which is significantly lower than its historical average, offering a solid entry point.