Retirees: Set it and Forget it With 3 Long-Term Growth Gems

Here are three top growth gems I think long-term investors may want to consider, particularly on any upcoming near-term dips.

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Canada is known for its mining industries and natural resources, making it one of the largest resource economies in the world. However, in terms of growth stocks in key industries like technology and biotech, there aren’t as many options as in other developed economies, particularly the U.S.

That said, there are certain under-the-radar growth stocks I think are worth diving into. The companies I’ve listed below are each leaders in their respective fields and have shown incredible and consistent long-term historical growth rates I think can continue.

Alimentation Couche-Tard

Alimentation Couche-Tard (TSX:ATD) operates a network of gas stations and convenience stores that span the globe. The company predominantly generates revenue by selling tobacco products, beverages, groceries, fresh food, marine fuel and more. In addition, external customers’ revenue comes under three categories: road transportation fuel, merchandise and services, and more.

Couche-Tard’s net earnings for the second quarter (Q2) of fiscal year 2024 came in at $819.2 million or, $0.85 per diluted share. This was a modest improvement over Q2 2023, which saw the company bring in $810.4 million, or $0.79 per diluted share, albeit with higher gas prices at that time.

Couche-Tard’s long-term value comes from the company’s growth-by-acquisition model. As Couche-Tard continues to consolidate its fragmented sector and expand into other high-growth markets, the company’s scale and market share gains provide a solid long-term defensive moat. A more slow-and-steady grower over time, this is a stock worth considering at current levels.

In addition, the company is eyeing an increase in its share price to last year’s highest per unit, $82.32. It is targeting to reach $86.65 per share in 2024, making it one of the best investment options for retirees.

Boyd Group

Boyd Group (TSX:BYD) is an auto body and glass repair service company operating in Canada and the United States. It predominantly operates under the Boyd Autobody and Glass brand name in Canada. Moreover, it is also one of the United States’s largest auto glass retailers. 

Like Couche-Tard, Boyd has grown over time utilizing an acquisition-focused model. The auto repair business is another niche market that remains highly fragmented. By buying smaller family-operated chains and improving their operating metrics over time, Boyd has provided incredible long-term growth to patient investors willing to buy the dips.

The company’s dividend-growth profile has also been impressive, despite its relatively small yield. Over time, long-term investors have been rewarded by holding this stock and watching the company’s business model continue to churn out higher cash flows.

The company’s revenue growth came in at an impressive 23% this past quarter, with sales continuing to benefit from the company’s expansion model. If interest rates drop, this is a company I think could have big upside from current levels.

Constellation Software

Constellation Software (TSX:CSU) develops and customizes software for private and public sector markets in Canada. The company operates in various markets, including credit unions, communications, tour operators, beverage distribution, textiles, apparel, and more. 

Constellation will release its fourth-quarter results on March 6, and anticipation is building in this stock ahead of its earnings. Over the past five years, Constellation’s stock price has more than tripled, and zooming further out, investors can view a stock chart that’s somewhat parabolic.

Consolidating the software industry with a similar model as the first two companies, Constellation remains one of Canada’s best tech conglomerates. With a portfolio of software solutions aimed at improving the efficiency of businesses of all sizes, Constellation’s core portfolio will remain in high demand for a long time to come.

I think Constellation could have the most upside of these three picks due to the company’s ability to target smaller artificial intelligence-related firms. Over time, such investments and integrations within the company’s existing product portfolio could boost its valuation big time. For now, investors have the ability to buy into a high-growth stock at a relatively reasonable valuation.

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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Boyd Group Services and Constellation Software. The Motley Fool has a disclosure policy.

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