Growth stocks exhibit superior growth potential compared to other stocks. Due to their robust growth, these stocks offer a high rate of return and can be compelling long-term investment choices.
Nevertheless, investors need to exercise caution, as growth stocks come with increased risk and can be highly volatile. With this backdrop, let’s look at three Canadian stocks to buy now with the potential to emerge as massive long-term winners.
WELL Health
Shares of the digital healthcare company WELL Health (TSX:WELL) should be on your radar to generate massive returns in the long term. WELL Health boasts an extensive network of clinics supporting primary care, specialized care, and diagnostics services in Canada. Further, it offers omnichannel patient services and solutions in the U.S., targeting gastrointestinal health, primary care and mental healthcare, and women’s health. The digital healthcare provider also sells technology software and solutions to medical clinics and healthcare practitioners.
WELL Health has consistently delivered solid growth thanks to its diversified revenue sources. Furthermore, the company is profitable, which supports my optimistic outlook. With continued growth in omnichannel patient visits, WELL Health has achieved record revenues in 19 consecutive quarters. Further, the company anticipates surpassing $900 million in annual revenue by 2024 through organic growth. Moreover, WELL Health is focusing on profitable growth strategies and accretive acquisitions, which will accelerate its growth.
Thanks to its solid organic sales and benefits from acquisitions, WELL Health is poised to deliver solid cash flows and grow its market share. Moreover, its ongoing investments in artificial intelligence technology will expand its product base and support long-term growth.
Dollarama
One shouldn’t be surprised to see Dollarama (TSX:DOL) stock on this list. This low-volatility stock has consistently outperformed the TSX with its returns and generated stellar returns for its shareholders. For instance, Dollarama stock has grown at a compound annual growth rate (CAGR) of over 23% in the last five years, delivering a total return of 184%. Furthermore, it has enhanced its shareholders’ returns through increased dividend payments.
This impressive growth is backed by the company’s solid financial and operating performance. This Canadian value retailer has grown its top line at a CAGR of 10% since fiscal 2011 (FY11). Its net earnings grew at a CAGR of 16% during the same period. Moreover, Dollarama has increased its dividend 12 times since 2012.
Looking ahead, the retailer’s value pricing strategy and extensive store base will drive its top line at a double-digit rate. Further, leverage from higher sales, direct product sourcing, and focus on reducing merchandise costs will cushion its earnings and support higher dividend payouts.
Shopify
Shopify (TSX:SHOP) is a must-have growth stock to create wealth in the long term. Shares of the Canadian tech giant have delivered an impressive return of over 455% in the past five years, which implies a CAGR of nearly 41%. Notably, this includes the correction following the COVID-led rally.
While Shopify stock has made its investors rich, it has the potential to deliver better returns in the coming years. The company’s durable top-line growth, new product launches, asset-light business model, and focus on generating sustainable profitability augur well for growth.
Shopify’s dominant positioning in the e-commerce space will enable it to capitalize on the structural shift in selling models toward digital platforms. Meanwhile, its go-to-market improvements and take-rate expansion will likely support its growth and share price.
