Retiring as a millionaire would be a dream of many. You can make your dream come true by being disciplined and making consistent investments. If you invest around $550 monthly in stocks that can deliver returns of over 12% annually, you can earn over $1 million in 25 years. Here are three stocks that can deliver over 12% in annual returns in the long run.
goeasy
goeasy (TSX:GSY) is an alternative financial services company offering subprime customers lending and leasing services. Over the last two decades, the subprime consumer lender has been growing its revenue and EPS (earnings per share) in double digits. Supported by solid financials, GSY stock has delivered over 2,500% returns in the last 20 years at a CAGR (compound annual growth rate) of 17.7%. Despite the solid growth, the company has acquired a small market share in its addressable market of subprime loans under $45,000. So, it has solid scope for expansion.
The company is expanding its product range, developing new distribution channels, and strengthening its automotive financing segment to drive growth. Meanwhile, the lender is witnessing stable credit and payment performance, with its net charge-off rate declining to 8.8%. Besides, it’s allowance for future credit losses has declined from 7.37% to 7.28%. Apart from these improving operating performances, the company is expanding its loan portfolio. It expects its loan portfolio to reach $6.2 billion by the end of 2026. So, goeasy’s growth prospects look healthy.
Besides, the Mississauga-based subprime lender has raised its dividend for 10 consecutive years while currently offering a forward dividend yield of 2.8%. Its valuation also looks attractive, with its forward NTM (next 12 months) price-to-earnings multiple at 9.9. Considering all these factors, I am bullish on goeasy.
Nuvei
Nuvei (TSX:NVEI) is another stock I believe would be an excellent long-term play. The growth of e-commerce has been making digital transactions popular, thus expanding the addressable market for the company. Meanwhile, the company is adding new APMs (alternative payment methods), launching new innovative products, making strategic partnerships, and geographically expanding its footprint to drive its financials.
Earlier this month, the payments processor launched an enhanced omnichannel payments solution, which aims to offer an enhanced and convenient experience for its customers. Besides, the Montreal-based technology company has opened a new office in Shanghai, China, to expand its presence in the Asia-Pacific region. So, its growth prospects look healthy.
However, amid the recent weakness due to concerns over an uncertain market environment, Nuvei has lost around 42% of its stock value compared to its 52-week high. Amid the sell-off, the company currently trades 12.4 times its projected earnings for the next four quarters, making it an excellent buy.
Dollarama
My final pick would be Dollarama (TSX:DOL), a discount retailer that operates around 1,540 stores across Canada. It offers a wide range of consumer products at attractive prices through its direct-sourcing capabilities and efficient logistics. Since fiscal 2011, the company has grown its top and bottom lines at an annualized rate of 11.3% and 17.5%, respectively. Supported by solid financials, the company has delivered over 680% returns over the last 10 years at a CAGR (compound annual growth rate) of 22.9%.
Meanwhile, the value retailer plans to increase its store count to 2,000 by the end of fiscal year 2031. It is also expanding its international presence through its subsidiary, Dollarcity, in which Dollarama has a 50.1% stake. With the average annual sales for stores opened within two years at $2.9 million, the expansion could continue to drive its financials in the coming years. DOL stock has rewarded its shareholders with consistent dividend growth since 2011.
