4 Growth Stocks to Buy and Hold Forever

Are you wondering what kind of Canadian growth stocks could be worth holding forever? Here are four stocks that could still provide exceptional returns ahead.

| More on:
Growing plant shoots on coins

Image source: Getty Images

Canada has some exceptional growth stocks. Some are well-known, and some trade under the radar of most investors. Many of these stocks today have soared in late 2023 and early 2024. As a result, their valuations are quite steep.

Any serious pullback would be a great time to buy these stocks and then hold them for years and even decades. Here are four growth stocks you want to buy and hold for nearly forever.

The GOAT of growth

The first “forever growth stock” is Constellation Software (TSX:CSU). It might be the GOAT (greatest of all time) for growth stocks in Canada. With a track record of delivering about 30% compounded annual growth rates for more than a decade, this stock is one of the best performers in Canada.

Remarkably, many Canadians are not even aware of this company despite its nearly $80 billion market cap. The reason is that it operates through hundreds of small, niche vertical market software businesses. These businesses are economically crucial to their customers. Consequently, it has a very resilient business.

Constellation acquires these businesses with a high return threshold. As a result, they tend to yield a lot of cash, which Constellation uses to acquire more businesses. It’s a great formula for compounding. Constellation is a very pricey stock today. However, it would be a great long-term purchase on a decent pullback.

A top financial stock

goeasy (TSX:GSY) is another strong contender for a long-term buy-and-hold stock. With interest rates quickly rising, many big Canadian banks have constrained lending to only their highest-quality clients. As a consequence, the market for non-prime and subprime consumer loans continues to expand.

goeasy is one of Canada’s largest and most well-known non/sub-prime lenders. It has locations across Canada and a strong online lending platform.

The company has recently expanded into auto/recreational vehicle finance and buy-now-pay-later financing. It is also looking to add new credit card and banking options.

Over the past three years, it has grown revenues and earnings per share by 17% and 18% respective compounded annual rates. It has a strong outlook to continue growing at a mid-teens rate going forward.

A global consulting firm

WSP Global (TSX:WSP) has been another growth stock worth holding for the long term. WSP has become a global leader in consulting, design, engineering, and project management. Revenues and earnings per share have grown by a respective 17% and 23% compounded annual rate over the past three years.

As populations rise around the world, demand for infrastructure will only grow. As a global leader, it stands to gain strong wins in its project backlog.

The company still has many acquisition opportunities to consolidate. Likewise, growth should come from improving margins, expanding service offerings, and market share gains.

An industrial growth stock

A final growth stock to hold for the long term is TerraVest Industries (TSX:TVK). TerraVest is not your typical growth stock. It owns a bunch of bland industrial businesses focused on heating, oil/gas, chemical/gas storage, and transportation.

The key has been its ability to deploy its capital at high rates of return. While it buys bland businesses, it buys them at cheap prices and takes their cash flows to invest in more cheap businesses.

It has been able to grow revenues and earnings before interest, tax, depreciation, and amortization by an approximate 35% annual rate over the past three years.

TerraVest has a young, smart management team and a highly invested board. If it can continue to deploy capital smartly, long-term investors could still do very well from here.

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 Robin Brown has positions in Constellation Software, Goeasy, TerraVest Industries, and WSP Global. The Motley Fool recommends Constellation Software, TerraVest Industries, and WSP Global. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

edit CRA taxes
Dividend Stocks

CRA: This Tax Break Can Help You Save Serious Money in 2024

This tax credit is one you've likely missed in the past but could provide you with thousands each year! So,…

Read more »

path road success business
Stocks for Beginners

3 Reasons to Buy Royal Bank Stock Like There’s No Tomorrow

Sure, RBC (TSX:RY) is the biggest bank, but there are more reasons beyond its size to consider this top dividend…

Read more »

Volatile market, stock volatility
Dividend Stocks

1 Dividend Stock Down 20% to Buy Right Now

Sienna stock (TSX:SIA) looks like a strong dividend stock that's only getting stronger, but there is more growth available.

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Stocks for Beginners

Got $5,000? 5 Stocks to Buy for Lasting Wealth

These five stocks can help you build a diversified portfolio that balances risk and reward.

Read more »

money cash dividends
Stocks for Beginners

Where to Invest $10,000 in April 2024

If you've already created a diversified portfolio and are looking for more options from a windfall, here is where I…

Read more »

money cash dividends
Stocks for Beginners

Have $500? 3 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

If you're looking for cheap stocks, these three have a huge future ahead of them, all while costing far less…

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

edit Sale sign, value, discount
Stocks for Beginners

These 3 Growth Stocks Are on Sale and Set to Surge

Some growth stocks are on sale right now that offer massive long-term potential for investors. Here's a trio to consider…

Read more »