2 Growth Stocks to Hold for the Next 10 Years

Given their solid underlying business and high growth prospects, these two growth stocks could deliver superior returns over the next 10 years.

| More on:
Credit card, online shopping, retail

Image source: Getty Images

After rising over 7.3% in the last quarter of 2023, the S&P/TSX Composite Index has maintained its uptrend, increasing by 0.3% this year. The expectation of central banks cutting interest rates this year has improved investors’ confidence, driving the equity markets higher. However, equity markets could remain volatile in the near term as several economists predict a global slowdown due to higher interest rates and conservative monetary policies.

Meanwhile, long-term investors should not worry about this short-term volatility and go long on quality stocks that can deliver superior returns in the long run. Growth stocks can grow their financials at an exceptional rate compared to the industry average, thus delivering higher returns in the long run. Here are two of my top picks, which have the potential to provide multi-fold returns over the next 10 years.

Nuvei

Nuvei (TSX:NVEI) is a Canadian fintech company that facilitates small and medium-scale enterprises to transact digitally, including APMs (alternative payment methods). The growing popularity of digital transactions has created multi-year growth potential for the company. Meanwhile, the company is geographically expanding its footprint, launching new products, growing its APM portfolio, and forming new partnerships to grow its customer base and financials.

The Montreal-based technology company has recently partnered with Adobe and Microsoft, which could grow its customer reach. Besides, it has also opened a new office in China to strengthen its presence in the Asia Pacific region. Amid the favourable environment and growth initiatives, Nuvei’s management is confident of growing its revenue at an annualized rate of 15-20% in the medium term. Besides, management expects its adjusted EBITDA margin to cross 50% in the long run.

Despite its growth prospects, Nuvei trades at an attractive forward price-to-earnings multiple of 12.1, while its price-to-book multiple stands at 1.7. Considering all these factors, I believe Nuvei would be an excellent buy at these levels.

goeasy

Another growth stock that I am bullish on would be goeasy (TSX:GSY). The subprime lender has grown its revenue and EPS in double digits for the previous 20 years. Supported by solid financials, the company has returned over 17,000% since 2000 at an annualized rate of 24%. Despite the strong growth, goeasy has acquired a small market share in the under $45,000 sub-prime credit market. So, it has substantial scope for expansion.

With the company maintaining stable credit and payment performance, its net charge-off rate declined from 9.3% to 8.8%. Besides, its allowance for future credit losses declined from 7.42% to 7.37%. Further, the company is launching new product offerings, expanding delivery channels, and focusing on strengthening its auto financing segment to drive growth. It has also tightened its credit tolerance limits, improved its underwriting and income verification processes, and adopted next-gen credit models to lower defaults and boost operating performance.

Amid these growth initiatives, goeasy’s management is confident of increasing its loan portfolio to $5.1 billion by the end of 2025, representing a 49% increase from its current levels. Also, the company’s management expects its revenue to grow at an annualized rate of 18.5% while improving its operating margins to remain higher than 36%. So, its growth prospects look healthy.

Meanwhile, GSY stock trades at an attractive NTM price-to-earnings multiple of 9.7 and offers a healthy dividend yield of 2.42%. Considering all these factors, I am bullish on goeasy. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nuvei. The Motley Fool recommends Adobe and Microsoft. The Motley Fool has a disclosure policy.

More on Tech Stocks

rising arrow with flames
Tech Stocks

1 Canadian Stock Ready to Surge in 2025 and Beyond

Finding a great, essential AI stock isn't hard. In fact, this one has a healthy balance sheet, strong growth, and…

Read more »

Hourglass and stock price chart
Tech Stocks

1 Canadian Stock Ready to Surge Into 2025

There is a lot of uncertainty about the market in general as we move closer to the following year, but…

Read more »

stock research, analyze data
Tech Stocks

Apple vs. Shopify: Which Stock Is the Better Buy for the Next 3 Years?

Apple (NASDAQ:AAPL) and Shopify (TSX:SHOP) are great tech titans, but they're ending the year with huge momentum.

Read more »

Investor reading the newspaper
Dividend Stocks

Emerging Investment Trends to Watch for in 2025

Canadians must watch out for and be guided by emerging investment trends to ensure financial success in 2025.

Read more »

nvidia headquarters with grey nvidia sign in front with nvidia logo
Tech Stocks

If You’d Invested $100/Month in Nvidia Starting a Decade Ago, Here’s How Much You’d Have Now

Nvidia has helped long-term investors create generational wealth. But is the tech stock still a good buy right now?

Read more »

chart reflected in eyeglass lenses
Tech Stocks

Is Shopify Stock a Buy, Sell, or Hold for 2025?

Shopify (TSX:SHOP) still looks like a tempting growth stock going into a new year with strength.

Read more »

A shopper makes purchases from an online store.
Tech Stocks

The Smartest Growth Stock to Buy With $1,000 Right Now

Given its solid sales growth, improved profitability, and healthy growth prospects, Shopify would be an excellent buy.

Read more »

Representation of deep learning neural networks and connectivity
Tech Stocks

Opinion: This AI Stock Has a Chance to Turn $1,000 Into $10,000 in 5 Years

If you’re looking for an undervalued Canadian AI stock with huge upside potential, BlackBerry (TSX:BB) should certainly be on your…

Read more »