Plan to Retire Rich? 3 TSX Stocks to Add to Your Portfolio Now

Are you investing for long-term goals? The three TSX stocks have the potential to outperform broader markets and deliver stellar capital gains.

| More on:
A golden egg in a nest

Image source: Getty Images.

Stocks are must-haves in your portfolio if you plan to invest for long-term financial goals like retirement. Further, as top Canadian stocks have witnessed a pullback amid macro uncertainty, now is an excellent opportunity to add a few fundamentally strong companies to your portfolio retire rich. 

But before allocating funds, investors should look for companies with a solid revenue base and profitable growth. Also, one must focus on diversifying their portfolio and should not put all of their money into a few stocks. This will reduce risk and ensure higher returns in the long term.

With this backdrop, I’ll discuss three profitable Canadian corporations, shares of which look attractive near the current levels. Further, these stocks have outperformed the broader markets in the past and have the potential to deliver outsized returns over the next decade. 

A top small-cap financial services company 

Growing at a CAGR (compound annual growth rate) of 23% in the last five years, goeasy (TSX:GSY) is a solid stock for investors planning to invest for the long term. This financial services company offers secured and unsecured loans to subprime borrowers and has been growing fast. For instance, goeasy’s top line sports a CAGR of 20% in the past five years. At the same time, its bottom line grew at a CAGR of 27%. 

Impressively, the company also pays dividend and has increased it in the last nine consecutive years. 

Looking ahead, the momentum in its business will likely sustain, driven by high-quality loan origination. While its consumer loan portfolio is forecasted to increase, its high-quality originations indicate that its credit portfolio will remain strong. Thanks to the recent pullback, goeasy stock trades at a next 12-month (NTM) price-to-earnings multiple of 6.4, which is much below its historical average of about 11, providing a solid entry point. 

A fast-growing fashion house

Aritzia (TSX:ATZ) offers lifestyle apparel and has been growing rapidly, despite pressure on consumer spending. The fashion house’s net revenue grew at a CAGR of 19% since fiscal 2018. Earnings growth was even better, as it increased at a CAGR of 28% during the same period. Thanks to the solid growth, Aritzia stock appreciated by approximately 250% in the past five years, delivering a CAGR of over 28%. 

The expansion of its boutiques, strength in the e-commerce channel, and growing brand awareness are contributing to its success. 

Aritzia expects its revenues to increase at a CAGR of 15-17% through 2027, reflecting new boutique openings, U.S. expansion, a favourable mix of full-priced sales, and e-commerce growth. Meanwhile, its earnings growth is projected to surpass sales. Thanks to the strength in its business, Aritzia is a solid stock to achieve long-term financial goals. 

Canada’s top air cargo company

The final stock in this list is Cargojet (TSX:CJT). Thanks to its resilient business and profitable growth, Cargojet has multiplied investors’ wealth in the past decade. The stock has witnessed a pullback due to a slowdown in the e-commerce space, presenting a solid buying opportunity for long-term investors. 

Cargojet’s diversified revenue streams, partnerships with large logistics companies, and next-day delivery capabilities to maximum Canadian households augur well for growth. Furthermore, its long-term contracts with minimum revenue guarantee and cost pass-through provisions are positives.

Cargojet has a 100% customer retention rate, which is incredible. Meanwhile, its focus on network and fleet optimization, international expansion opportunities, and high entry barriers to the sector provide a solid base for long-term growth. 

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Aritzia and Cargojet. The Motley Fool has a disclosure policy.

More on Investing

A golden egg in a nest
Dividend Stocks

Investing for Retirement? Check Out These Dividend-Paying Stocks in Canada

Dividend-paying stocks like First National Financial are on sale in June 2023.

Read more »

The sun sets behind a high voltage telecom tower.
Dividend Stocks

Fortis Stock Is a Steady Dividend Player for Your Energy Portfolio

You can rely on Fortis stock for growing dividend income. Aim to buy the stock on market corrections to boost…

Read more »

Family relationship with bond and care

TFSA Investors: Get Ready for Retirement With These Top Stocks

Here are three Canadian stocks to consider right now. 

Read more »

financial freedom sign

Retire on Your Terms: 3 TFSA Stocks for Financial Freedom

Are you in the market for stocks you can hold in a TFSA? Here are three top picks!

Read more »

A plant grows from coins.

Don’t Miss Out on the American Dream: Invest in the S&P 500 for Long-Term Wealth

Canadian investors can chase their own version of the American dream if they choose to snatch up BMO S&P 500…

Read more »

Path to retirement
Dividend Stocks

Investing for Retirement? These Dividend Stocks Can Help You Get There

TD Bank and Brookfield Renewable Partners are two solid dividend-growth stocks to hold for decent total returns through retirement.

Read more »

Businessman holding AI cloud
Tech Stocks

Unlocking Profit Potential: 5 AI Stocks to Watch in 2023

AI stocks such as Nvidia and Microsoft have the potential to deliver outsized gains to investors in the upcoming decade.

Read more »

tsx today
Stocks for Beginners

TSX Today: What to Watch for in Stocks on Tuesday, June 6

TSX stocks may remain volatile today, as traders adjust their open positions ahead of Bank of Canada’s interest rate decision…

Read more »