Investors planning to invest in stocks to create wealth in the long term should focus on shares of companies with solid fundamentals, including durable revenue growth and the ability to generate sustainable earnings. Since these companies consistently generate solid financials, their stocks outperform the broader equity markets in the long term.
With this backdrop, let’s look at five Canadian stocks you can confidently invest $500 in right now.
Investors planning to buy stocks could consider investing in the shares of Alimentation Couche-Tard (TSX:ATD). This convenience store operator operates a low-risk business, consistently generating strong revenue and earnings growth. For instance, over the past decade, its top and bottom lines have grown at a compound annual growth rate (CAGR) of 7.3% and 18.8%, respectively. Moreover, the company has increased its dividend at a CAGR of 26.6% during the same period.
Thanks to its strong financials, Couche-Tard stock has delivered an impressive average annualized return of over 20% in the past decade. Looking ahead, its extensive store presence, large addressable market, focus on expanding private label offerings, distribution optimization, and entry into new categories will support its growth and share price.
Financial services company goeasy (TSX:GSY) could be a solid addition to your portfolio. The company provides loans to nonprime borrowers and has been growing rapidly over the past decade. goeasy’s revenue has a 10-year CAGR of 17.7%. At the same time, its earnings per share (EPS) grew at a CAGR of 29.5%. Also, it has increased its dividend for nine consecutive years.
Thanks to its stellar financial performance, goeasy stock has appreciated about 1,139% in the past 10 years. goeasy is poised to benefit from the large subprime lending market, its strong competitive positioning, loan growth, and stable credit performance. Further, operating efficiency will cushion its bottom line and drive dividend payments.
Canadian Natural Resources
Next are the shares of Canadian Natural Resources (TSX:CNQ). The energy company has steadily generated solid capital gains and returned significant cash to its shareholders through higher dividend payments. For instance, Canadian Natural Resources stock has gained more than 217% in the last five years. Moreover, it has increased its dividend for 24 consecutive years.
The energy company’s diversified assets and high-value reserves will drive its financials in the coming years. Further, its focus on increasing production from long-life oil sands mining and reducing downtime augurs well for growth. Also, its low debt-to-adjusted funds flow ratio and strong balance sheet position will likely support its growth initiatives.
Dollarama (TSX:DOL) is another reliable stock to invest in all market conditions. The retailer is known for selling products at low and fixed price points. This enables it to drive traffic even amid economic downturns. Thanks to its low-risk business model, Dollarama stock remains less volatile. Further, its high growth rate drives its share price higher.
Dollarama’s value pricing strategy, extensive domestic store network, focus on lowering merchandise costs, and direct sourcing could continue to drive its financials and share price. At the same time, it will likely enhance its shareholders’ value through increased dividend payments.
Shopify (TSX:SHOP) is the final stock on this list. While Shopify stock has lost substantial value from its peak, it remains well-positioned to capitalize on the ongoing shift towards omnichannel selling models. Notably, Shopify’s dominant competitive positioning in the e-commerce space, durable revenue growth rate, and higher adoption of its products augur well for growth.
Further, Shopify’s transition toward an asset-light business model, new product launches, and focus on delivering profitable growth supports its bull case. Meanwhile, its take-rate expansion and go-to-market improvements are encouraging.