2 TSX Winners That Could Win Again in 2024

Alimentation Couche-Tard (TSX:ATD) stock and another TSX winner could continue beating the broader markets for years to come.

| More on:
Hands holding trophy cup on sky background

Image source: Getty Images

Momentum investing can get new investors in all sorts of trouble. Investing is not simply buying what only seems to go up or what’s hot among your friends at any given time.

There are fads that come and go so quickly and gains that are lost at the drop of a hat. Instead of participating in such short-lived euphoric surges, I’d much rather you invest in stocks with long-term momentum, modest valuations, and predictable earnings growth prospects.

Momentum is only bad if there aren’t earnings to back things up! In the tech scene, investors like to look too ahead into the future and perhaps neglect conducting a discounted cash flow (DCF) model to appropriately value such a company.

Additionally, whenever there’s hype, it can be tempting to overestimate a firm’s ability to compete in a nascent market that may not be as rich in opportunity. For starting investors who can’t see far into the future, there are profitable companies that have a formula for beating the market.

Such TSX winners are likely to keep on winning, assuming the price you pay isn’t too high. In this piece, we’ll look at two of my favourite winners that I believe are poised to keep winning for years to come.

Dollarama

Dollarama (TSX:DOL) is more than just your run-of-the-mill dollar store. It’s a discount retailer that’s built quite a brand for itself in Canada, a market that’s seemingly less competitive than in the U.S., a market where there’s more than a handful of publicly traded discount retail stocks. Through smart supplier partnerships, Dollarama has been able to pass savings to its consumers, even amid hefty levels of inflation. Indeed, staying on budget is all too easy by shopping over at the local Dollarama.

As inflation bites, while the economy rumbles, Dollarama may still have the means to surge even higher from here. Though consumers can recover in 2024, I don’t expect the bargain-hunting and scarcity mentality to go away anytime soon. As Dollarama continues opening new stores over the coming years, it’s hard not to stand by the firm as it keeps on winning.

The stock has crushed the TSX in impressive fashion over the past two years, soaring over 73% in the timespan, while the TSX Index actually shed about 5%.

Alimentation Couche-Tard

Sticking with the retailing theme, we have Quebec-based convenience store giant Alimentation Couche-Tard (TSX:ATD). The company is best known for its Circle K line of stores (many locations across Canada used to be called Mac’s).

With an impressive balance sheet and a talent for spotting deals in the industry to scoop up, I view Couche-Tard as an earnings growth knight who has an engine that could keep running strong many years into the future.

Indeed, Couche-Tard proves that you don’t need to overcomplicate things to do incredibly well in markets. I remain a big fan of the stock and plan to buy on any corrections going into 2024. At 18.8 times trailing price to earnings, shares still aren’t all too expensive, despite rising over 65% in the past two years!

If I were to bet, I’d bet on ATD stock over the TSX Index for 2024!

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 Joey Frenette has positions in Alimentation Couche-Tard. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool has a disclosure policy.

More on Investing

The sun sets behind a high voltage telecom tower.
Dividend Stocks

Should You Buy Northland Power for its 5% Dividend Yield?

Northland Power stock trades 52% below all-time highs and offers shareholders a tasty dividend yield of 5% right now.

Read more »

TFSA and coins
Dividend Stocks

2 Top Stocks to Add to Your TFSA in February 2024

These two TSX stocks can be excellent holdings for your self-directed TFSA portfolio to inject stability and tax-free wealth growth.

Read more »

edit Back view of hugging couple standing with real estate agent in front of house for sale
Stocks for Beginners

Investors: What to Expect From Canada’s Real Estate Market in 2024

What does 2024 hold for Canada’s real estate market? Let's find out from Nathan Levinson of Royal York Property Management.

Read more »

dividends grow over time
Dividend Stocks

Passive-Income Seekers: Invest $10,000 for $400 or More in Annual Income

Are you interested in generating passive income? Invest $10,000 for a hefty annual income!

Read more »

edit Sale sign, value, discount
Tech Stocks

Got $1,000? 2 Stocks to Buy Now While They’re on Sale

These two top Canadian growth stocks look underpriced right now to buy for the long term.

Read more »

Two seniors float in a pool.
Tech Stocks

Could Nuvei Stock Help You Become a Millionaire?

Nuvei stock is favourably priced today for growth focused investors to buy. Could the stock enhance your chances to build…

Read more »

Canadian Dollars
Dividend Stocks

Want Decades of Passive Income? 3 Stocks to Buy Now

Want passive income that could last a lifetime? These three top Canadian dividend stocks have a good chance of delivering…

Read more »

Two seniors float in a pool.
Dividend Stocks

Retiring on Dividends: How Much Do You Need to Quit Work?

Canadians might need more than $1 million to quit work, but can still live comfortably in retirement with sustained dividend…

Read more »