Investing in the shares of companies that continue to perform well regardless of market conditions is an excellent strategy to build wealth in the long term. Thankfully, the TSX has several fundamentally strong companies that deliver solid financials irrespective of the economic situation, making them attractive investments.
So, if you have $500, consider investing in these five Canadian stocks to outperform the broader markets in the long term.
goeasy (TSX:GSY) operates a non-prime consumer lending business with a solid track record of producing stellar growth in all market conditions. The company’s top line has increased at a CAGR (compound annual growth rate) of 17.7% between 2012 and 2022. During the same period, its adjusted earnings per share (EPS) grew at a CAGR of 29.5%. Further, it improved at a CAGR of 19.44% in the last five years (as of June 30, 2023). At the same time, its EPS had a CAGR of 31.91%.
Its high-quality loan originations and expanded product base will drive its top line at a double-digit rate in the coming years. Meanwhile, steady credit performance and operating efficiency will cushion its bottom line. The company will further enhance its shareholders’ returns via higher dividend payments.
Brookfield Renewable Partners
Clean energy company Brookfield Renewable Partners (TSX:BEP.UN) is another top stock. The company’s large installed capacity of 31,600 megawatts, highly contracted business, and long-term agreements add stability to its revenue and cash flows and support its growth.
Looking ahead, its diversified asset base and growing adoption of renewable energy sources augur well for growth. Moreover, its robust development pipeline and low operating costs will continue to drive its top- and bottom-line growth. Furthermore, the company could continue to enhance its shareholders’ returns through higher dividend payments (plans to increase the dividend by 5-9% in future years).
Loblaw (TSX:L) is Canada’s largest food and pharmacy retailer. The company’s low-risk business, large scale, broad product offerings, and value pricing continues to drive its top and bottom line growth regardless of the economic situation.
The growing penetration of low-priced private-label brands, inflation-fighting price freeze, and attractive loyalty rewards program will likely support its top-line growth. Further, its strategic procurement, modernization and automation of its supply chain, and focus on optimizing its retail network are anticipated to drive its margins and improve productivity.
Similar to Loblaw, Dollarama (TSX:DOL) is a reliable stock in the retail space. Dollarama offers a wide range of products at low fixed-price points, which drives consumers towards its stores in all economic situations. The company’s resilient business, solid growth, and ability to return cash to its shareholders make it a solid long-term bet.
The company’s extensive network of stores in the domestic market and value pricing will continue to drive its revenue and EPS at a decent pace. Further, its growing international footprint bodes well for future growth.
Aritzia (TSX:ATZ) stock is an attractive investment near the current levels. The luxury fashion brand’s revenue and earnings sport a CAGR of 26% and 23%, respectively, between fiscal 2019 to fiscal 2023. While the near-term margin concerns have led to a correction in Aritzia stock, this presents a solid buying opportunity for long-term investors.
The company expects to grow its revenues by 15-17% annually through 2027. The opening of new boutiques, favourable store economics, expansion in the U.S., and strength in the e-commerce segment will drive its top and bottom lines.