Stocks offer better returns than most other asset classes, especially in the long term. Thus, one must allocate a portion of their savings in shares of fundamentally strong companies for wealth creation. Further, one can start investing with any amount. I’ll discuss top stocks you can buy with $500 right now that have solid growth potential.
Aritzia
Trading under $30, one could consider investing in Aritzia (TSX: ATZ) stock. The fashion brand primarily focuses on women’s clothing and accessories and has a solid history of delivering high growth and outperforming the broader markets. Aritzia’s net revenue and earnings have increased at a CAGR (compound annual growth rate) of 26% and 23% from fiscal 2019 to fiscal 2023. In addition, the company projects 15-17% growth in its revenues per year through 2027.
Opening new boutiques will support its top- and bottom-line growth, as its store economics remain attractive with a low average payback period. Further, its expansion in the U.S. (a high-growth market) and focus on driving brand awareness will accelerate its growth rate. Aritzia stock has witnessed a pullback, providing a good opportunity for investors to buy it near the current levels.
Shopify
Shopify (TSX: SHOP) stock is a solid long-term bet. The internet-based commerce platform provider is poised to gain from the ongoing digital transformation and shift in selling models toward omnichannel platforms. Its strong gross merchandise volumes, growing merchant base, and increased number of customers buying multiple solutions will drive its top line.
Further, the increased penetration of its innovative products like Shopify POS, Markets, and Capital will support its growth. Also, Shopify is focusing on reducing costs to drive sustainable earnings, which is encouraging. Shopify stock has recovered a bit in 2023. However, it is still trading at a discounted valuation from its high and offers significant growth.
Brookfield Renewable Partners
Investors could consider investing in the pure-play clean energy company Brookfield Renewable Partners (TSX: BEP.UN). With its solid installed capacity of 31,600 megawatts and robust development pipeline, Brookfield Renewable Partners is well positioned to capitalize on the growing adoption of renewables and favourable government policy support.
Brookfield Renewable Partners owns long-life assets with low operating costs, which cushions its margins. In addition, approximately 90% of the power output is contracted, which adds stability to its cash flows. Further, the company also benefits from the long weighted average remaining life of contracts, which adds visibility over its future earnings potential. Overall, Brookfield Renewable Partners offer solid growth and income.
goeasy
goeasy (TSX: GSY) is a must-have stock to generate outsized capital gains in the long term. The company has delivered massive returns over the past decade and enhanced its shareholders’ value through higher dividend payments. goeasy’s solid returns and dividend payouts are supported by its robust financials. It’s worth highlighting that goeasy’s top line has grown at a CAGR of 19.44% in the past five years. During the same period, its earnings per share increased at a CAGR of 31.91%.
Looking ahead, higher loan originations, stable credit performance, and focus on cost savings will drive its top and bottom lines. Furthermore, the company’s growing earnings base will enable it to boost its shareholders’ returns through higher dividend payments.
Bottom line
These Canadian stocks are backed by solid businesses and have generated significant returns for their shareholders in the past. Further, these companies have multiple growth catalysts that will drive their financials and support their stock price and payouts.
