Want $1 Million in Retirement? Invest $50,000 in These 3 Stocks and Wait a Decade

Hyper-growth stocks like Constellation Software could turn $50,000 into a million by 2033.

Hyper growth stocks are rare, but all you need is a single hit to create immense wealth. Some stocks have turned relatively modest investments into millions of dollars. Looking ahead, here are three stocks that could potentially turn a small sum of $50,000 into $1 million within a decade.

Constellation Software

Enterprise software is in an attractive position right now. Valuations are lower while earnings in some segments are robust or expanding. That’s the perfect opportunity for a conglomerate like Constellation Software (TSX: CSU) to swoop in and consolidate the market. 

The Constellation team has deployed over $1 billion into new acquisitions in recent months. That’s the fastest pace it has ever clocked. I expect these recent acquisitions to be reflected in the company’s earnings reports in the next few quarters. 

There are emerging signs of this already. Constellation reported 34% year-over-year growth in revenue in its latest quarter (Q1 2023). If this pace continues, I expect earnings and free cash flow to expand at an annualized rate of 34% or more for the foreseeable future. 

If earnings expand at 35% compounded annually over the next 10 years, a $50,000 investment today could turn into $1 million by 2033.  That’s why Constellation deserves a spot on your long-term growth watch list. 

WELL Health Technologies

WELL Health has already created a fortune for early investors. Since going public in 2016, the stock is up a whopping 4,590%. That means a $50,000 investment would have turned into roughly $2.3 million within six years. 

The stock could still be a wealth creator even if the growth rate slows down. In its most recent earnings report, the WELL Health team locked in annual revenue of $569.1 million for 2022. That’s 88% higher than the previous year. Adjusted EBITDA came in 74% higher than the previous year. 

This year, management forecasts revenue of up to $710 million, which is 24.5% higher than 2022. However, the team has surpassed its previous forecasts so it’s likely to happen again this year. If WELL Health can deliver a 35% EBITDA growth rate compounded over 10 years, a $50,000 investment could turn into a million by 2033.

Neighbourly Pharmacy  

The private pharmacy market in Canada is highly fragmented. There are over 6,500 independently owned pharmacies in Canada. Toronto-based Neighbourly Pharmacy (TSX: NBLY) is an emerging player that’s trying to consolidate the sector. 

Since 2015, the Neighbourly team has acquired over 291 locations across Canada. That’s allowed the company to rapidly ramp up growth. In fiscal 2022, the company reported revenue growth of 40%. In fiscal 2023, the team managed to boost acquisitions to 113 locations and pushed revenue up 75% year over year.

Now, the team believes there are at least 3,500 more potential targets that fit their criteria. Simply put, there’s plenty of room for growth ahead. Meanwhile, the stock is down 23.4% since it went public in 2021. Neighbourly’s enterprise value-to-EBITDA ratio is just 1.6, which makes it an undervalued target in my view. 

If the company can expand EBITDA at 35% or more and perhaps boost its valuation ratios, turning $50,000 into a million should be realistic. Keep this small cap stock on your watch list.

Fool contributor Vishesh Raisinghani has positions in Constellation Software and Well Health Technologies. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy.

More on Investing

man looks worried about something on his phone
Dividend Stocks

Telus Stock: Buy, Sell, or Hold After the Dividend Cut?

Telus just cut its dividend in half, and the real question now is whether the reset finally makes the payout…

Read more »

customer comparison shops in liquor store
Investing

Dollarama Expects Its Sales to Increase: Is the Stock a Good Buy Now?

Dollarama just raised its full year sales guidance again. Here's what's driving the growth, and whether the TSX stock still…

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Energy Stocks

Is Too Much Cash Holding Back Your TFSA?

Cash feels safe, but keeping too much of it in a long-term TFSA can quietly erode your future buying power.

Read more »

telehealth stocks
Tech Stocks

Want to Retire Early? This Canadian Stock is a Good Place to Start

VitalHub crossed $100 million in recurring revenue with no debt and over $120 million in cash. Here's why this Canadian…

Read more »

abstract visualization of digital data processing
Investing

This Week in Canadian Stocks: Winners, Losers, and What’s Next for the TSX

HIVE Digital Technologies (TSX:HIVE) and other TSX names that made big moves in the past week.

Read more »

Investor wonders if it's safe to buy stocks now
Dividend Stocks

Your GIC Is Maturing: Would a Dividend Stock Make More Sense Now?

Canada’s GIC rates are cooling off, so a regulated utility like Emera could offer similar income plus long-term growth potential.

Read more »

The sun sets behind a power source
Dividend Stocks

Power Hungry? 1 Utility Stock That Looks Like a Steal After Dipping 24%

AI could strain power grids for years, and Algonquin is trying to reset as a simpler regulated utility.

Read more »

Safety helmets and gloves hang from a rack on a mining site.
Metals and Mining Stocks

Falling Metals Prices Are Dragging Down Canadian Mining Stocks

Copper, gold, and silver prices tumbled in September, dragging TSX mining stocks lower. Here is what happened and why Lundin…

Read more »