Could Dollarama Stock Help You Become a Millionaire?

Here’s why Dollarama stock has the potential to make you rich over the long term.

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Dollarama (TSX:DOL) stock has been one of the most reliable Canadian stocks in the last decade. Even as COVID-19-driven challenges and macroeconomic woes made most other TSX stocks highly volatile in recent years, DOL stock has consistently been delivering double-digit positive returns for five consecutive years.

But can Dollarama stock help you become a millionaire? Let’s take a closer look at Dollarama stock’s past performance in detail and the company’s future growth prospects to see if the stock has the potential to make you rich.

Dollarama stock

If you don’t know it already, Dollarama is a Mont Royal-headquartered company with a market cap of $27.8 billion as its stock currently trades at $99.54 per share with 4.2% year-to-date gains. It has a large network of more than 1,540 stores across Canada that offer a wide range of products at low prices, including essential household items, processed food products, healthcare products, and seasonal goods. Its affordable product range has helped Dollarama build a loyal customer base.

DOL stock started trading on the Toronto Stock Exchange in October 2009 with its IPO (initial public offering) of over 17 million shares priced at $17.50 per share. Since then, its share prices have yielded roughly 470% positive returns for its loyal investors. Simply put, an investment of $5,000 in Dollarama stock at the time of its IPO could have turned into $28,500 today, excluding the income from its dividends. Another indicator of how secure Dollarama stock has been in the long run is the fact that it has risen in value in nine out of the past 10 years.

Dollarama’s financials have witnessed strong growth in the last few years as the demand for its affordable products remains high even in difficult economic environments.

Although the company’s financial results for its fiscal year 2024 (ending in January) have not yet been reported, its total revenue rose 55% over the five years from fiscal year 2018 to 2023. More importantly, Dollarama delivered a solid 82% increase during the same five years, reflecting its ability to maintain strong profitability despite adverse market conditions.

Could DOL stock help you become a millionaire?

Besides its strong financial growth trends, Dollarama has also increased its focus on expanding its product mix by introducing slightly higher-priced items in the last few years. Such initiatives have helped the company expand its profit margins as sales per store continue improving. It has also been investing in its e-commerce platform, which is helping Dollarama reach more customers. Moreover, Dollarama has a long track record of maintaining financial growth with strong margins and a robust financial base.

All the positive factors we have discussed above clearly suggest that DOL stock could continue delivering exceptional returns over the long term. However, the prospect of it making you a millionaire depends on various factors, including your initial investment size, risk appetite, and investment timeframe. That said, instead of investing a large sum of money in a single stock, you should focus on diversifying your portfolio by adding more fundamentally strong stocks like Dollarama to it.

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.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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