If there’s one stock that could potentially help investors retire a millionaire, it has to be Dollarama (TSX:DOL). Dollarama stock has been on the market since 2009, growing larger and larger in share price all the time.
During that time, Dollarama stock is likely to have pushed investors into millionaire status. The question is, can it do it again? So, let’s look at why this could certainly happen by the time some investors retire.
A defensive play
It might seem strange to consider Dollarama stock a defensive play. But it’s absolutely true. The company has a long history as a low-cost retailer, providing Canadians with the lowest prices and pushing back on inflation as long as they possibly can.
So, during an economic downturn, Canadians seek out Dollarama stock for all their products. And that’s expanded in recent years. The company has brought in more and more household brand names, from food to appliances, that Canadians certainly recognize.
The question is whether this can continue after a downturn. If Canadians suddenly don’t need to find the cheapest products, then perhaps Dollarama stock will see a shrink in revenue. But analysts don’t think that will happen.
Bad times and good
While bad times can actually be a good time to pick up Dollarama stock, good times can be as well. As management has stated, Canadians may seek out the company during downturns, but more cash in their pockets means more spending during good times as well.
Those good times led to the company being able to expand. This has happened in two ways. First, there’s been through opening more store locations. There’s also expansion through acquisitions. There haven’t been many of these in the past, but when they’re done, it’s been to wild success.
Consider DollarCity in Latin America, where Dollarama stock has seen major growth. And now, there are rumours that the company will be expanding in Australia as well. If that should happen, there is plenty of reason to believe that the stock will see more growth in the next few decades to come.
Bottom line
If you had invested hoping to become a millionaire by 2024 back in 2009, it certainly would have been possible. Shares have grown 3,067% in that time! That would mean to make $1 million by 2024, you would have had to buy 10,526 shares back in 2009.
So, in 2009, if you had purchased 10,526 shares at about $3 per share when they came on the market, that would have meant investing $31,578.95 back then. That’s certainly doable for many investors. While nothing is for certain, it’s also not that long of a period!
Should shares do this again, even just 20 years could see shares grow by leaps and bounds, as the company proves its worth. So, is $1 million possible? Absolutely — especially if you buy now and hold until you hope to retire, even with a pretty small investment.
