Stocks can deliver significant returns, especially in the long term. Moreover, one doesn’t need a lot of cash to start investing in stocks, as shares of several fundamentally strong companies with good growth prospects are currently available under $100.
Against this backdrop, let’s look at two under-$100 Canadian stocks you can buy now and hold forever.
Lightspeed
Lightspeed (TSX: LSPD) stock presents an attractive investment opportunity at its current price levels, especially for investors with a long-term horizon. This tech company specializes in providing a cloud-based commerce platform for small- and medium-sized businesses. Its consistently strong financial performance and solid organic growth support its bull case. Moreover, Lightspeed stock is currently trading at an attractively low valuation, providing a solid buying opportunity.
Notably, Lightspeed’s stock is trading at an enterprise value-to-sales (EV/sales) ratio of 2.1, significantly below its historical average of over 15 and close to its all-time low.
Beyond its compelling valuation, Lightspeed stock offers solid growth. The company is well positioned to capitalize on the ongoing digital shift. The continued increase in businesses shifting towards omnichannel selling models will drive demand for payment solutions. Further, with the expected economic improvement, small- and medium-sized companies will likely invest in technology and upgrade their payment systems. This will drive demand for Lightspeed’s digital products.
Furthermore, Lightspeed stock will likely benefit from the shift in its go-to-market strategy. The company is growing its high gross transaction value (GTV) customer base, as these customers can adopt its multiple modules. This presents a significant opportunity for the company to continue to expand its average revenue per user (ARPU). Moreover, it will reduce churn and cushion its margins.
Besides growing organically, Lightspeed’s prudent capital allocation sets the stage for accretive acquisitions, accelerating its growth rate, expanding its customer base, and strengthening its competitive position.
In summary, Lightspeed stock presents a compelling combination of value and growth for long-term investors.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX: ATD) is another top stock to buy under $100. This low-volatility stock presents a combination of solid growth potential, stability, and income. The company operates convenience stores. Moreover, it retails fuel and provides EV (electric vehicle) charging. While it owns a low-risk business, Couche-Tard stock has a solid track record of consistently outperforming the broader markets.
For instance, its stock is up about 27% in one year. Moreover, it has appreciated nearly 523% in value over the past decade, reflecting a compound annual growth rate (CAGR) of over 20%. The stock’s solid growth is backed by the company’s impressive financial performance. Its total revenues have grown at a CAGR of 7.3% in the last decade. Moreover, its adjusted earnings per share (EPS) increased at a CAGR of 18.8% during the same period.
Besides capital gains, Couche-Tard’s shareholders have benefitted from the company’s focus on returning cash to its shareholders through increased dividend payments. Alimentation Couche-Tard increased its dividend at a CAGR of 26.6% since 2013, which is encouraging.
Overall, Alimentation Couche-Tard’s low–risk business, focus on offering convenience and value pricing, extensive store presence, and expansion of private label offerings could continue to drive its top and bottom line at a healthy pace and support its share price. Moreover, its accretive acquisitions will accelerate its growth rate.
