Investors looking to create significant wealth in the long term through stocks should invest in companies that consistently deliver strong financial performance. The TSX has several such fundamentally strong companies capable of delivering solid financial performance regardless of the economic situation. Consequently, investors can confidently invest in those Canadian stocks to outperform the broader equity market.
So, if you plan to invest $500 in stocks, here are five Canadian stocks that should be on your radar.
goeasy
goeasy (TSX:GSY) is a solid long-term stock. It offers secured and unsecured loans to nonprime borrowers and has been consistently growing its top and bottom line at a double-digit rate. For instance, goeasy’s revenue has a five-year (as of September 30, 2023) compound annual growth rate (CAGR) of 19.6%. At the same time, its earnings per share (EPS) increased at a CAGR of 31.9%.
Thanks to its stellar financial performance, goeasy stock has consistently outperformed the broader markets. It has gained nearly 349% in value in five years. Moreover, it enhanced its shareholders’ returns through increased dividend payments during the same period. Its ability to drive loans, large addressable market, stable credit performance, and operating efficiency position it well to deliver solid growth over the next decade and support the uptrend in its share price.
Alimentation Couche-Tard
Shares of the convenience store operator Alimentation Couche-Tard (TSX:ATD) could be a solid addition to your portfolio. The company owns a low-risk business and offers stellar growth. In addition, investors will likely benefit from its focus on returning cash to its shareholders via increased dividend payments. Couche-Tard stock has grown at a CAGR of 18.6% over the past five years, delivering a total return of more than 135%.
Alimentation Couche-Tard’s value offerings, extensive store presence, and focus on expanding private label offerings will drive its financials and share price. Also, its accretive acquisitions will likely support its growth rate.
Dollarama
Besides Alimentation Couche-Tard, Dollarama (TSX:DOL) is another attractive play in the retail space. This value retailer remains immune to the economic situation, offering stability to your portfolio. While Dollarama is a low-volatility stock, it offers significant growth. For instance, Dollarama stock sports a five-year CAGR of 23.7%, which is encouraging.
The company sells products at low fixed prices, driving traffic in all market conditions. Further, its extensive domestic store network and focus on lowering merchandise costs augur well for growth. Thanks to its solid earnings base, Dollarama is committed to returning cash to its shareholders through increased dividend payments.
Shopify
Shopify (TSX:SHOP) has created significant wealth for its shareholders and is one of the top stocks to own. Despite macro headwinds, the e-commerce platform provider has been delivering solid revenue growth. Thanks to its durable sales, Shopify has gained over 95% in one year. Further, it generated a return of 399% in five years.
The stock is poised to gain from the company’s dominant positioning in the e-commerce space and the ongoing shift toward digital platforms. Furthermore, Shopify’s transition toward an asset-light business model, innovative products, and focus on delivering profitable growth support its bull case.
WELL Health
The final stock on this list is WELL Health Technologies (TSX:WELL). This digital healthcare company has consistently delivered solid growth regardless of macro uncertainty. While its top line is growing at a solid pace, the company is profitable on the bottom line front. It recently unveiled an enterprise-wide cost optimization initiative to boost operational efficiency and increase operating cash flow, which is positive.
Moreover, the company’s growing omnichannel patient visits and investments in artificial intelligence to expand its product base will drive its future revenue and earnings. Also, its accretive acquisitions will strengthen its competitive positioning and support its financials.
