Investing in equity markets would be one of the better ways to create wealth. Even a small but regular investment can create substantial wealth in the long term. However, investors should be careful when choosing stocks. They should look for companies with solid growth potential, impressive financials, and strong cash flows. Meanwhile, I favour the following two TSX stocks that have the potential to deliver multi-fold returns in the long run.
Nuvei (TSX:NVEI) facilitates businesses to accept next-gen payments. It supports over 150 currencies and 600 APMs (alternative payment methods) operating in over 200 markets. Despite the challenging environment, the company posted a solid 2022 performance last month. Its revenue and adjusted earnings per share grew by 16% and 10%, respectively. It also generated an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $351.3 million while closing the year with a cash balance of $752 million.
Meanwhile, the uptrend in Nuvei’s financials could continue amid the growing popularity of digital payments. Grand View Research projects the global digital payments market to grow at an annualized rate of 20% through 2030. Given the favourable environment, the company’s management has provided optimistic guidance for this fiscal year, with the midpoint of the total volume guidance representing a 54% growth from the previous year. Meanwhile, new product launches, APM portfolio expansion, new market ventures, and Paya Holdings’s acquisition could drive its volume growth.
Amid its volume growth, Nuvei’s management hopes to grow its revenue and adjusted EBITDA by around 47.5% and 32.7%, respectively. The company could also benefit from expanding its presence in the online sports betting industry through license wins and broadening its customer base. Despite its solid financials and healthy growth prospects, the company trades at an attractive NTM (next 12-month) price-to-earnings multiple of 20, making it an excellent long-term buy.
WELL Health Technologies
Another stock that I am betting on is WELL Health Technologies (TSX:WELL), which offers comprehensive end-to-end solutions to healthcare practitioners. It reported an impressive 2022 performance last month, with its revenue and adjusted net income growing by 88% and 228%, respectively. The strong performance from its virtual service segment and strategic acquisitions drove its financials. The company had around 4.9 patient interactions last year, representing an 86% increase from the previous year.
Meanwhile, the telehealthcare market is expanding amid increased adoption and growing internet penetration. Amid the expanding addressable market, WELL Health focuses on developing innovative products, venturing into new markets, and making strategic investments to boost its financials.
WELL Health is focused on acquiring assets in Canada and the United States to strengthen its footprint. It has also made a substantial investment in doctorly GmbH, a German-based medical practice management software company. The investment could act as a launch pad for the company to expand its presence in Germany. Also, around 96% of its revenue in 2022 is recurring or highly recurring, thus providing stability to its financials. Meanwhile, the company’s management expects its revenue to grow by 17-20% in 2023, while its adjusted EBITDA could grow by 10%. However, amid the weakness in growth stocks, the company trades at an attractive NTM price-to-earning multiple of 18.6, making it an excellent long-term buy.