As an investor, you may get distracted by temporary issues when the market fluctuates. However, if a stock performs well, there’s always the temptation to sell and lock in those gains. Some stocks are buy-and-hold opportunities that are worth leaving on the shelf and forgetting about. These three growth stocks I’m going to discuss in this article have excellent total return upside and remain among the most robust options Canadian investors can choose from to create a balanced long-term portfolio.
With that, let’s dive in!
Shopify
One of the biggest e-commerce platform providers in the world, Shopify (TSX: SHOP) offers a range of services to small- and mid-sized businesses. The company’s ability to enable a plethora of retailers to move online has provided incredible long-term growth. Zooming out on the stock chart below, early investors have clearly been rewarded by stocking with Shopify since its inception.
Of course, the stock chart has looked quite different since Shopify hit its peak in late 2021. Indeed, despite a recent impressive rally off of 2022 lows, Shopify still remains roughly 50% below its all-time high, meaning another big move could be on the horizon if investors value the company’s future cash flows in a similar fashion as they did a little more than two years ago.
The company’s fourth-quarter (Q4) revenue-growth rate of 26% remains strong, and investors betting on a reacceleration of growth moving forward may be well-rewarded by buying this stock here.
Boyd Group
Boyd Group (TSX: BYD) is a Canadian-based auto body and glass repair services company. The company operates predominantly under the brand name Boyd Autobody and Glass in Canada and Gerber Collision and Glass in the United States. It derives a majority of its revenue from activities in the U.S., making this an excellent pick for Canadian investors looking for geographical diversification outside of Canada.
Boyd’s long-term chart is about as impressive as the other names on this list. The company continues to grow via an acquisition-oriented model, in which the company scoops up mom-and-pop players in key markets, consolidating the overall sector.
With decades of potential consolidation ahead of Boyd, this is a company with plenty of growth runway. The company’s revenue growth rate of 23% is almost as impressive as Shopify’s (which really says something), and BYD stock does provide a small dividend yield of just 0.2%.
No investor is really going to buy this stock for its dividend — it’s all about Boyd’s long-term growth prospects. In that regard, there are few better options on the TSX right now, in my opinion.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX: ATD) operates a convenience store network in North America, Scandinavia, Ireland, Poland, Russia and the Baltics. It primarily generates revenue through selling groceries, tobacco products, fresh food, quick service restaurants, etc. Moreover, the company operates under the name Circle K in China, Malaysia, and Egypt.
The company has agreed to acquire retail assets from the French energy giant Total Energies SE for $4.5 million to expand its operations in Europe. This move furthers the company’s growth strategy, which is similar to Boyd’s, with Couche-Tard’s focus on consolidating the gas station and convenience store space in its core markets rather than auto body shops.
That said, Couche-Tard’s ability to go into new markets, acquire a footprint, and immediately improve the return on equity and key operational metrics of the businesses it acquires is impressive. This is a company that continues to pump out surging top- and bottom-line growth, allowing Couche-Tard to continue to raise its dividend (most recently by 25%).
In terms of total returns, Couche-Tard could be the best pick on this list. Rest assured, long-term growth investors are going to get some serious growth owning these three names.
