Investors reeling under the pressure of a stock market selloff should understand that, on average, a bear market lasts for 289 days. Historically, each bear market has been followed by an elongated bull run, allowing the most patient investors to build generational wealth over time.
Amid stock market volatility, you need to identify a basket of quality growth and blue-chip stocks and purchase them at attractive valuations. Here are five such TSX stocks that can help you grow your equity portfolio to $1 million when a bull market returns.
Well Health stock
A company operating in the digital health space, Well Health (TSX: WELL) stock is valued at a market cap of $1.11 billion. Well Health has increased sales from $32.8 million in 2019 to $570 million in 2022, mainly due to highly accretive acquisitions.
This rapid expansion in the top line has allowed the company to improve profit margins, too. Analysts forecast adjusted earnings to touch $0.23 per share in 2024, compared to the breakeven net income reported in 2022.
Restaurant Brands International stock
One of the most popular quick-service restaurant chains in Canada, Restaurant Brands International (TSX: QSR), also offers investors a dividend yield of 3.5%. These payouts have increased every year since 2014.
QSR owns and operates several brands, such as Burger King, Tim Hortons, Popeyes Louisiana Kitchen, and Firehouse Subs. Each of these businesses grew sales in 2022, allowing QSR to end the year with $1.7 billion in revenue, an increase of 9.2% year over year.
Brookfield Infrastructure Partners stock
A diversified company, Brookfield Infrastructure Partners (TSX: BIP.UN), has a wide portfolio of cash-generating assets across verticals such as transportation, utilities, midstream, data centres, and more.
A steady stream of cash flows allows BIP stock to offer investors a forward yield of 4.7%, which is quite tasty. The TSX stock is currently trading at a discount of over 40% to consensus price target estimates.
Canadian Natural Resources stock
An energy giant part of the TSX index, Canadian Natural Resources (TSX: CNQ) has already returned 1,800% to shareholders in dividend-adjusted gains since March 2003. While CNQ is part of a cyclical industry, it has increased dividends at an annual rate of 23% in the last 23 years, which is quite exceptional.
Despite these stellar numbers, CNQ stock is priced at 8.4 times forward earnings, which is really cheap. Moreover, its dividend yield is quite tasty at 5%.
Constellation Software stock
The final TSX stock on my list is Constellation Software (TSX: CSU). Since its initial public offering in May 2006, CSU stock has returned a staggering 17,550% to shareholders. CSU is among the largest tech stocks in Canada, valued at a market cap of $50.5 billion.
Over the years, the company has grown its revenue and profit margins by focusing on highly profitable acquisitions. Its target companies provide mission-critical software services to enterprise clients resulting in high customer engagement rates and high switching costs.
The Foolish takeaway
An investment of $50,000 in each of these five stocks will help investors grow their portfolio value to $1 million in the next 10 years, given annual returns of 9.7%. If these stocks return an average of 22% annually, your portfolio will be worth $1 million in a little under seven years.
Canadian investors should identify similar companies that are fundamentally strong and create a robust portfolio of TSX stocks.
