Rising Stars: Canadian Small-Cap Stocks to Consider in June 2023

Given their long-term growth potential and attractive valuation, these three small-cap stocks could deliver multi-fold returns in the long run.

| More on:
Man holding magnifying glass over a document

Image source: Getty Images.

Given their smaller size, small-cap stocks offer higher growth prospects and can deliver superior returns in the longer run. Owing to their limited resources, however, these companies are highly susceptible to market volatility, thus making them riskier. So, investors with longer investment horizons can buy these stocks to earn superior returns. Here are three top small-cap stocks you could consider buying now.

WELL Health Technologies

WELL Health Technologies (TSX:WELL) is a digital healthcare company focusing on leveraging technology to facilitate healthcare practitioners offering virtual services. It also owns and operates an extensive network of tech-enabled outpatient healthcare clinics across Canada.

Technological advancements and increased internet penetration have led to increased adoption of telehealthcare services, thus creating multi-year growth potential for the company. Meanwhile, the company has invested in AI (artificial intelligence) technology to develop new products and enhancements, which could improve patients’ experience. Amid its growth initiatives and continued acquisitions, WELL Health’s management has provided impressive 2023 guidance. The guidance projects revenue and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to grow by over 21% and 10%, respectively.

Meanwhile, WELL Health has witnessed solid buying this year, with its stock price rising by over 90%. Its solid quarterly performances appear to have increased investors’ confidence, driving its stock price higher. Despite the surge, its NTM (next 12 months) price-to-sales multiple stands at 1.8, making it an attractive buy.


Savaria (TSX:SIS) is another worthy small-cap stock to have in your portfolio due to its impressive performance and healthy growth initiatives. Last month, it reported a solid first-quarter performance. Its topline grew 15.3% to $211.6 million driven by strong organic growth of 13.5%. Its accessibility and patient care segments reported impressive gains, while its adapted vehicles segment witnessed a marginal decline of 0.8%, impacted by unfavourable currency translation.

Also, its gross margin expanded by 2.1% to 34%, thus driving its net profits. For the quarter, the company posted an adjusted EPS (earnings per share) of $0.13, representing a 30% increase from its previous year’s quarter. Further, the company’s management projects revenue growth of 8-10% for this year amid rising demand, cross-selling initiatives, and higher backlog levels. Additionally, management hopes to reach revenue of $1 billion by the end of 2025. So, its growth prospects look healthy.

Savaria pays a monthly dividend of $0.0433/share, translating into a forward yield of 3.03%. Its valuation also looks attractive, with its NTM price-to-sales multiple at 1.3.

Jamieson Wellness

Jamieson Wellness (TSX:JWEL), which manufactures, markets, and distributes natural health products across 45 countries, would be my final pick. Over the previous five years, the company has returned over 70% at a CAGR (compounded annual growth rate) of 11.2%. Healthy financials and strategic acquisitions have driven its stock price. Since 2018, the company’s revenue and EPS have grown at a 12.7% and 16.2% CAGR, respectively.

I expect the uptrend in Jamieson Wellness’ financials to continue, given its focus on product expansion, strengthening of its distribution channels, and e-commerce growth. The company’s management projects its 2023 revenue to grow by 22-28%, while its adjusted EPS could increase by 5-11%. It also pays a quarterly dividend of $0.17/share, with its forward yield currently at 2.2%.

Meanwhile, the company has been under pressure this year, losing over 14% of its stock value. Amid the pullback, JWEL trades at an NTM price-to-earnings multiple of 18.1, making it an excellent long-term buy.

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 Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.  

More on Investing

sale discount best price

3 Remarkably Cheap Stocks to Buy Right Now

These top TSX dividend stocks are trading at big discounts to their 12-month highs.

Read more »

Growth from coins

Got $3,000? 3 Growth Stocks to Double Up on Right Now

Canadian investors who have some cash to spend should look to top growth stocks like MTY Food Group Inc. (TSX:MTY)…

Read more »

woman analyze data

1 Under-the-Radar Dividend Stock to Buy and Hold

Bank of Nova Scotia (TSX:BNS) stock keeps getting cheaper, making it a top value pick for the end of September.

Read more »

tsx today
Energy Stocks

TSX Today: What to Watch for in Stocks on Thursday, September 28

The U.S. quarterly GDP data and Fed chair’s comments about the economy will remain on TSX investors’ radar today.

Read more »

close-up photo of investor Warren Buffett

The Best Warren Buffett Stocks to Buy With $300 Right Now

An investing lessons by Warren Buffett was to buy the dip. The market is giving you buying opportunity with these…

Read more »

man sitting in front of 3 screens programming
Tech Stocks

2 Growth Stocks to Hold for the Next 10 Years

Are you interested in growth stocks? Here are two picks to hold for the next 10 years!

Read more »

Canadian Dollars
Dividend Stocks

Buy 734 Shares of This Top Dividend Stock for $9,574 a Year in Passive Income

Are you looking to earn regular income? Now is an opportune time to buy Dividend Aristocrats at discounts and accelerate…

Read more »

A plant grows from coins.
Dividend Stocks

This Ultra-High Yield Stock Just Hit a 52-Week Low, and it’s Still a Buy Today

Enbridge Inc (TSX:ENB) stock recently hit a 52-week low. Here's why.

Read more »