2 Top Stocks to Own for the Next Bull Market

The top TSX stocks are worth seeking in both bullish and bearish markets. But if you can buy them just before a long-term bullish phase, you may boost the overall return potential.

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A bull outlined against a field

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The TSX has been fluctuating for a while now. In the last 12 months, the S&P/TSX Index has gone through at least five slump and growth cycles. The index is going up right now, but it’s difficult to predict how long the bull market phase will last.

But whether it is the beginning of the long-term bullish phase (like the one that followed the great recession) or if it’s just another half of the cycle, there are at least two stocks that should be on your radar.

These are the stocks that already have strong momentum, but a bull market may accelerate their pace, which may allow you to accumulate more growth in a relatively short amount of time when the market starts to stabilize or wane.

A convenience store chain

Laval-based Alimentation Couche-Tard (TSX:ATD) started out with a single store in 1980 and made its first major acquisition in 1985. It has experienced astonishing growth since then and now has a portfolio of over 14,400 stores and gas stations in 24 countries, though the bulk of its presence is in North America.

The massive global footprint may indicate a cost-intensive operation, but it also comes with enormous growth potential. Despite its massive scale, there are just three brands under the ATD umbrella. It’s one of the largest companies in Canada by market capitalization, which is currently at $75 billion.

It’s important to understand that the Alimentation stock is already quite bullish and has grown 29% this year alone. Despite its rapid growth, the valuation is quite reasonable, which adds to the company’s attraction.

The growth pace is already quite significant, but a bull market can accelerate it further, and it may carry the stock upward farther than its own momentum would have taken it. So, now may be a good time to consider adding this stock to your portfolio.

A tech company

Another acquisition-oriented company with decades of growth history endorsing its strong business model is Constellation Software (TSX:CSU). It’s one of the best growth stocks, not just in the tech sector but on the TSX as a whole.

Its growth is unique because even though it matches the rapid growth pace that’s characteristic of tech stocks in Canada, it also incorporates stability and consistency that’s a hallmark of the blue chips from other industries.

In the last decade, the stock has grown by over 1,400%, and the overall returns (if you include the dividends) are close to 1,780%. The dividends are not its strongest characteristic since, thanks to its explosive growth, the yield is usually quite low (0.13% right now).

Apart from its history, one thing that lends credibility to its long-term stability potential is its ownership structure. Only about 54% of the company is owned by public investors. The rest is controlled by institutions and insider owners.

  • We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Constellation Software made the list!

Foolish takeaway

The two stocks, considering the possibility that they will keep growing at their current rate, can be a powerful addition to your portfolio in the long term. But if you can buy them ahead of the next bullish phase, the short-term returns may be significant as well.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy.

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