The stock market dynamics keep changing at a fast pace. This is one of the key reasons why investors should ideally revisit their stock portfolio and make required changes to it from time to time, especially if they want to keep pace with emerging market trends.
In this article, I’ll talk about two such attractive Canadian stocks investors can buy in 2023 to expect better than market returns on their investments over the long term.
Sleep Country stock
Sleep Country Canada (TSX: ZZZ) could be a promising stock to consider in Canada right now. Despite the ongoing broader market uncertainties, this soft furnishing and specialty sleep retailer’s share prices have shown impressive performance in 2023 so far. With a market capitalization of about $989 million, ZZZ stock currently trades with nearly 24% year-to-date gains at $28.53 per share. Besides the stock’s long-term growth potential, investors can also benefit from its dividend payments as it offers an annualized dividend yield of 3.3% at this market price.
Not only has Sleep Country’s stock showcased a bullish movement lately, but the company’s recent financial growth trends also remain largely positive. In the first quarter of 2023, its total revenue of $206.5 million surpassed analysts’ estimates by 5%. Similarly, its quarterly gross profit and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) also outperformed Bay Street’s expectations. These better-than-expected quarterly results reflect its management’s focus on effectively managing operations to deliver solid performance even in a tough economic environment.
Overall, Sleep Country’s healthy stock performance, coupled with its resilient financials and commitment to shareholder returns, makes it an impressive investment opportunity on the TSX today.
Kinaxis stock
Kinaxis (TSX: KXS) could be another great addition to the portfolio for investors seeking solid returns on their investments in the long run. It’s a supply chain planning and digital supply chain software firm based in Ottawa with a market capitalization of $5.3 billion. The company’s stock has shown impressive performance lately, with about 22% year-to-date gains, currently trading at $185.22 per share. While Kinaxis stock has seen a slight decline of 2.2% in July, given its strong fundamental outlook, it has the ability to outperform the main TSX index by a wide margin in the long term.
In the first quarter of 2023, Kinaxis’s reported a 3.1% year-over-year increase in sales to US$101.1 million. Additionally, its adjusted quarterly earnings of $0.40 per share per share were more than 9% higher than the Street’s estimates of US$0.37 per share. More importantly, its annual recurring revenue showcased strength during the quarter, growing positively by 23% from a year ago with the addition of some big brands in its client base.
In June 2023, Kinaxis expanded its product offerings by unveiling a new innovative product that aims to better organize its clients’ end-to-end supply chain process by utilizing the power of its artificial intelligence-driven tool. Such consistent efforts could give Kinaxis an edge over the competition and help its financials grow even faster in the coming years, making its stock look attractive to buy now and hold for years.
