While becoming wealthy through stock market investing is the goal, it is never a guarantee. Investing in high-risk and high-growth stocks without regard to whether the underlying companies can truly deliver on that front, in the long run, is a big mistake many new investors make.
Generally, stocks that have a strong potential to deliver about 1,000% returns over an extended period are considered millionaire-maker stocks. However, it is essential to take your time to identify companies with a realistic ability to grow revenues and earnings faster than the broader market to ensure that they can capture outsized gains for meaningful wealth growth.
The TSX has produced several millionaire-maker stocks. However, investing in companies that have already delivered those multi-bagger returns does not guarantee similar returns to what early investors earned.
The multi-fold return stocks of the future are more likely small market capitalization stocks right now. It is important to identify those with the ability to provide the kind of shareholder value a few years or decades from now that they can make current investors wealthier.
Today, we will look at two potential millionaire-maker stocks you can consider buying for your self-directed portfolio today.
Telus International
Telus International (TSX:TIXT) is not a small-cap stock, valued at $3.71 billion as of this writing. The Canadian tech company provides IT services and multilingual customer service to global clients. Headquartered in Vancouver, it is known as a digital customer experience innovator designing, building, and delivering next-gen solutions.
The company boasts several massive clients across various business verticals, including the tech and games, e-commerce, fintech, healthcare, travel and hospitality, and communications and media markets.
The company operates in a rapidly growing space, consistently onboarding new clients to keep growing its revenue and earnings.
The last three quarters have seen it grow its sales by a 10th on a year-over-year basis. While sales growth has slowed down in recent quarters, it has a substantial growth runway that can allow it to grow value for its investors for years to come. As of this writing, it trades for $12.09 per share, down by 75.16% from its October 2021 all-time high.
Payfare
Payfare (TSX:PAY) is another little-known Canadian tech stock, and it falls within the small-cap category with a $338.88 million market capitalization as of this writing.
Payfare is a global fintech company that offers mobile banking, instant payment, and loyalty reward solutions. The company’s financial technology platform is empowering financial inclusion for next-generation workers worldwide through a full-service mobile bank account.
It also offers debit cards with instant access to earnings, while providing excellent cash-back rewards. Operating primarily in Canada, the U.S., and Mexico, it has several brands working with it.
Gig economy workers in its markets have been benefitting through the convenience it offers, and the demand is reflected in its performance. Its third quarter of fiscal 2023 saw it grow its revenue by 35% year over year, with a 32% growth in its active users in the same period.
At the same time, it more than tripled its adjusted net income and saw its free cash flow rise by just less than a third in the quarter from the same period in the previous year. As of this writing, it trades for $7.08 per share.
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Foolish takeaway
In this day and age, tech stocks are the likeliest companies to become the millionaire-maker investments many Canadian investors seek for their self-directed portfolios today. While not guaranteed, Telus International stock and Payfare stock are two of the most promising Canadian tech stocks you can consider adding to your holdings for this purpose.
