The Canadian stock market closed out 2023 with a bang. The S&P/TSX Composite Index surged more than 10% in the last two months of the year, which explains why there was so much optimism heading in 2024. But with the market trading near all-time highs, is now the right time to invest?
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Investing in 2024
There’s more than just a strong year-end finish to be bullish this year. Yes, many individual stocks came roaring back in 2023 to deliver market-beating gains. But in addition to that momentum, there’s the very real possibility that we’ll not only see interest rates remain flat in 2024 but potentially see cuts as well.
Concerning the extreme volatility that investors today are all too familiar with, that may be here to stay, at least for 2024. It’s been a key theme for investors since the early days of the pandemic. But as long as you’re willing to be patient, the TSX is ripe with opportunities.
Here’s a list of three top growth stocks to add to your watch list today.
Stock #1: Shopify
It was a heck of a rebound year for Canada’s tech giant Shopify (TSX:SHOP). Shares were up over 100% last year, which puts the tech stock up a market-crushing 450% over the past five years. Still, Shopify continues to trade at a discounted price of 50% below all-time highs from 2021.
As still a relatively young company, there’s likely going to be plenty more volatility along the way. But if you can handle that, there’s a very real chance that Shopfy will continue to outperform the market’s returns for years to come.
Don’t miss your chance to load up on this top company while shares continue to trade at such an opportunistic discount.
Stock #2: Constellation Software
Growth investors looking to minimize risk should consider this market-beating stalwart. At more than $3,000 a share, investors will need to pay up to invest in Constellation Software (TSX:CSU). However, the tech stock has proven that it’s well worth its steep price.
A $70 billion market cap size isn’t slowing growth down all that much for the company. Shares are up more than 250% over the past five years. In comparison, the broader Canadian stock market has returned less than 50%.
It may be past its multi-bagger years, but this company is second to none when it comes to consistent, market-beating returns.
Stock #3: Northland Power
In terms of growth potential, my last pick pales in comparison to the first two tech companies that were reviewed. However, in addition to market-beating growth potential, Northland Power (TSX:NPI) can be a significant passive-income generator as well.
The renewable energy sector as a whole has struggled since 2021, which is another reason to have this company on your radar right now. Excluding dividends, shares are down 50% since the beginning of 2021.
Putting the sector’s recent struggles aside, it’s hard to ignore the long-term growth opportunity for renewable energy providers.
As a Canadian leader who also has an international presence, Northland Power is a great company to own for exposure to the growing renewable energy space.
At today’s stock price, the company’s dividend is yielding just shy of 5%. That’s not bad considering the company has a history of also delivering market-beating returns.
