The stock market provides you with enough opportunities to create long-term wealth. Every major pullback in equities should be viewed as a buying opportunity, allowing investors to benefit from outsized gains over time.
Here are two top TSX stocks you can buy with $10,000 right now that can help you generate inflation-beating returns in the upcoming decade.
GFL Environmental stock
Valued at a market cap of $15.6 billion, GFL Environmental (TSX: GFL) is the fourth-largest environmental services company in North America. GFL has increased its revenue from $3.34 billion in 2019 to $6.76 billion in 2022. Analysts expect sales to grow by 10% to $7.43 billion in 2023.
During its second-quarter (Q2) earning call, GFL stated it sold three non-core assets part of the U.S. solid waste management vertical, which generated between $400 million and $450 million in revenue. It received $1.6 billion in proceeds from the divesture, which will be used to reduce balance sheet debt.
GFL expects to end 2023 with adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $2 billion, indicating a margin of 27%. Comparatively, its free cash flow is forecast at $705 million, which can be used to increase its dividends, reinvest in capital projects, or further strengthen its balance sheet.
Brookfield Asset Management stock
Valued at a market cap of $17.48 billion, Brookfield Asset Management (TSX: BAM) is among the largest companies in Canada. It is a financial behemoth with US$850 billion in assets under management, or AUM.
BAM focuses on verticals such as clean energy, transportation, private equity, credit, infrastructure, and real estate. It forecasts AUM to surge over US$2 trillion with fee-bearing capital to more than double to US$1 trillion in the next five years.
BAM also expects alternative investments to grow at a steady pace in the upcoming decade as insurance companies, high-net-worth individuals, and institutional investors increase their allocation to this asset class.
Brookfield Asset Management is well positioned to benefit from these secular tailwinds, as it continues to invest heavily in thematic megatrends such as decarbonization.
Moreover, the company remains bullish on the expansion of the private credit segment due to the recent collapses witnessed in the banking sector. A research report from Preqin estimates the private credit market to grow to US$2.3 trillion in 2027, up from US$1.5 trillion in 2023.
Similar to other asset managers, Brookfield generates a majority of its revenue from fees. The expansion of its fee-bearing revenue should allow Brookfield to enjoy recurring revenue, providing it with stability across market cycles. Brookfield is optimistic the widening scale of fee-related earnings and a shift toward profitable investment strategies will help it end 2028 with fee-based revenue of US$4.8 billion, up from US$2.2 billion in 2023.
This should also allow Brookfield to increase its annual dividend over time. Currently, Brookfield Asset Management pays shareholders an annual dividend of $1.73 per share, translating to a forward yield of 3.9%.
The company aims to pay 90% of its distributable earnings to shareholders via dividends. It expects earnings growth to help it increase dividends by 15-20% each year, making BAM stock a top bet right now.
