After close to two years of painstaking volatility, the Canadian stock market is finally showing signs of bullishness. Since last October, the S&P/TSX Composite Index is up close to 15%. It’s been a long time since Canadian investors have witnessed a bull run like that.
Investing in growth stocks today
Growths stocks have led the way for the Canadian stock market’s recent success. After a disappointing performance in 2022, growth investors had a year of redemption last year. 2023 ended with a bullish surge, and those gains have continued right into this year.
As hot as the Canadian stock market is right now, there’s still no shortage of discounted growth stocks on the TSX to choose from today. At this rate, though, many of those high-flying growth stocks might not be trading at bargain prices for much longer.
With that in mind, I’ve reviewed two beaten-down stocks that long-term growth investors should have on their radar. These prices won’t last forever, so I wouldn’t wait long to pull the trigger on these two companies.
Stock #1: goeasy
As a consumer-facing financial services provider, goeasy (TSX:GSY) has understandably taken a hit in this high-interest-rate environment. With rate hikes likely behind us now, we’ve already seen the stock react positively. Imagine what will happen to the stock once we begin seeing actual rate cuts.
Shares are up a whopping 50% since last October only. Even so, the growth stock is down more than 20% below all-time highs that were set in late 2021.
There are not many Canadian stocks that have outperformed goeasy in recent years. Even with the 20% pullback from all-time highs, shares are nearing a return of 300% over the past five years. In comparison, the Canadian stock market has returned about 30%, excluding dividends.
Canadian investors have not had many opportunities in the past to load up on goeasy at a discount. And with interest rate cuts, hopefully, around the corner, I wouldn’t bet on these cheap prices being available for much longer.
Stock #2: Brookfield Renewable Partners
Now could be an excellent time for a long-term investor to be loading up on a renewable energy stock or two. The sector has struggled since early 2021, presenting investors with no shortage of buying opportunities on the TSX right now.
There are more reasons than one to have Brookfield Renewable Partners (TSX:BEP.UN) on your radar. As a $20 billion company with an international presence, the stock provides instant diversification to the renewable energy space.
Despite the company’s well-diversified product offering, the stock has had no trouble outperforming the market in recent years. Even with shares down nearly 50% from all-time highs, Brookfield Renewable Partners has been a market beater over the past five years. And that’s not even including dividends, either.
If diversification, market-beating growth potential, and a massive value play aren’t enough, there’s also a whopping 6% dividend yield to enjoy. In fairness, the yield has shot up as the stock price has plummeted. But even when the stock returns to new all-time highs, the dividend will likely remain at a respectable yield — especially considering everything else the company can provide an investment portfolio.
