Investors ready to invest $5,000 into stocks in November 2023 should look for companies with solid fundamentals and a history of consistent growth. Further, one must consider industries with the potential to perform well in the future. Importantly, instead of concentrating all funds in a single stock, focus on diversifying your portfolio. This could help spread risk.
Against this backdrop, I’ll discuss three Canadian stocks that one can buy with $5,000 to beat the broader market in the long term.
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Shopify
Shares of e-commerce platform provider Shopify (TSX:SHOP) are a solid long-term bet. The ongoing shift in selling models towards omnichannel platforms provides a strong foundation for multi-year growth by driving demand for Shopify’s offerings. This will uplift Shopify stock. It’s worth noting that Shopify stock registered a strong recovery year to date. Further, it remains well positioned to deliver massive returns in the long term.
The optimism over Shopify’s prospects stems from the fact that the company continues to grow sales rapidly, even at a large scale. For instance, Shopify’s total revenue marked an impressive year-over-year growth of 27% in the nine months of 2023. Notably, the increase in adoption of its innovative products, like Payments and Capital, and the addition of sales and marketing channels will likely drive its merchant base, attach rate, and overall volumes and revenues. Further, Shopify focuses on streamlining its business, reducing costs, and generating sustainable earnings, all contributing to its positive trajectory.
In summary, the durability of its revenues, ability to generate higher gross merchandise volumes, growing merchant base, and focus on improving profitability augurs well for long-term growth. Moreover, the company’s forecast of improving the attach rate is encouraging and reinforces my optimistic perspective.
goeasy
With its ability to consistently deliver double-digit solid sales and earnings growth, goeasy (TSX:GSY) stands out as a reliable stock poised to outshine the broader markets and create wealth in the long term. For instance, goeasy’s top line sports a five-year CAGR (compound annual growth rate) of 19.62% (as of September 30, 2023). Impressively, the company’s earnings per share (EPS) has a CAGR of stellar 31.85% during the same period.
Despite macro headwinds, goeasy’s top line increased by 22% in the nine months of 2023. At the same time, the company’s adjusted EPS registered a growth of 20%.
Looking ahead, the company’s growing loan portfolio, large subprime lending market, large product base, and omnichannel offerings will drive its revenue. Meanwhile, its solid credit performance, high-quality assets, and improving operating leverage will cushion its earnings and lead to higher dividend payouts.
Aritzia
Aritzia (TSX:ATZ) stock came under pressure and dropped over 48% year to date, reflecting a deceleration in its sales growth rate. Moreover, the company grappled with a lack of innovation in its product offerings and a challenging macroeconomic environment that hindered consumer expenditure on non-essential items. All of these contributed to the decline in Aritzia stock.
Nonetheless, Aritzia is focused on bringing newness to its offerings, which will likely accelerate its growth. Moreover, its square footage expansion, selective pricing actions, reduction of costs, and opening of its new distribution centre will support its financials and uplift its stock.
Further, Aritzia’s management is confident to grow net revenue at a CAGR of 15-17% through 2027. Moreover, its earnings growth will likely exceed its revenue growth rate. Overall, its focus on opening new boutiques, new product offerings, strengthening its e-commerce platform, and increasing brand awareness provides a solid foundation for long-term growth.
