Stocks tend to outperform other forms of assets in the long term. Thus, investing in them is a smarter strategy to create a significant amount of wealth. However, when investing for the long term, investors should consider shares of companies with a growing revenue base and large addressable market. Further, one should focus on companies with a history of profitable growth or the ability to achieve sustainable profitability in the long term.
Against this backdrop, here are five fundamentally strong Canadian stocks with the potential to deliver massive returns over the next decade. It’s worth highlighting that these Canadian stocks have generated market-beating returns for their shareholders in the past and have solid growth prospects. Let’s dig deeper.
Shopify
Shopify (TSX: SHOP) is a must-have stock for creating wealth. Shares of this Canadian e-commerce company rebounded in 2023, reflecting investors’ confidence in the tech sector. Despite the recent recovery, Shopify is trading at a significant discount from its historical valuation, offering a good entry near the current levels.
Shopify’s ability to grow its topline even at a large scale, innovative products like Payments and Capital, and ongoing migration towards multichannel selling platforms augur well for growth. Furthermore, the company’s focus on easing pressure on margins and delivering sustainable profit supports the bull case.
goeasy
Next up is a highly profitable financial services company, goeasy (TSX: GSY). Barring the recent pullback in its stock, this subprime lender has consistently outperformed the broader markets and made its investors rich due to its ability to deliver double-digit sales and earnings growth for decades. Besides capital appreciation, goeasy’s shareholders have also benefitted from its solid earnings payouts.
A large non-prime lending market, high-quality loan originations, stable credit performance, and operating leverage will likely drive its revenue and profitability and, in turn, its stock price. Further, GSY’s low valuation and regular dividend hikes make it attractive.
Brookfield Renewable Partners
From finance, let’s move to the renewable energy space. The sector is expected to benefit from increased focus on decarbonization and significant capital investments. Within the green energy sector, one could consider investing in Brookfield Renewable Partners (TSX: BEP.UN), a pure-play renewable energy company.
The stock will likely benefit from secular sector trends, its diversified assets base, long-term contracts, and a solid development pipeline of 126,000 megawatts of renewable power assets. Further, investors will profit from its attractive dividend payouts.
Aritzia
Aritzia (TSX: ATZ) stock has solid growth prospects thanks to the stellar demand for its offerings, its ability to drive full-price sales, and the expansion of boutiques. The company expects to grow its revenue at a mid-teens rate in the coming years. At the same time, the company expects its earnings growth to outpace sales.
Notably, Aritzia stock has witnessed a correction in the recent past, which provides a good buying opportunity for long-term investors. Overall, steady demand, expansion into high-growth markets, and visibility over future earnings will likely drive its stock price higher.
Cargojet
Like Aritzia, Cargojet (TSX: CJT) stock has witnessed a pullback, providing a solid opportunity to buy the shares of this air cargo company. Cargojet’s diversified revenue base, partnerships with top logistics companies, and next-day delivery capabilities to most Canadian households will likely drive its financials. Further, long-term contracts and a high customer retention rate bode well for growth.
Cargojet stock is also expected to benefit from increased e-commerce penetration. Further, network and fleet optimization, high entry barriers to the sector, and opportunities in the international market support my bullish view.
