2 Stocks With Millionaire-Maker Potential

Almost all growth stocks can be millionaire makers if you keep them in your portfolio long enough. However, a long holding period makes them vulnerable to unforeseen circumstances.

| More on:
financial freedom sign

Image source: Getty Images

Millionaire-maker potential is a relatively vague term in the absence of other important variables like the amount of capital you are starting with and the number of years you will hold the so-called millionaire-maker stock.

However, if we set reasonable quantities for both, say $50,000 to $100,000 in capital and 10 to 20 years of the holding period, the pool of stocks with millionaire-maker potential shrinks quite a bit.

A tech stock

When you are looking for powerful growth, tech stocks are an easy pick in North America, but even though many of them offer powerful growth, they are not always consistent.

However, one stock that offers the best of both worlds is Constellation Software (TSX:CSU). This software holding company has six major software businesses under its umbrella, which, in turn, have a wide range of software businesses, mostly catering to individual vertical markets.

As a result, Constellation has a massive reach — over a hundred countries and the client portfolio exceeds 125,000. A massive chunk of the stock is held by institutional investors, which lends adequate stability to the stock. It’s also a consistent dividend payer with a solid history and a small yield, but the most impressive feature of this stock is its compelling growth.

It returned nearly 280% in the last five years, and while it’s a far cry from its last 10 year’s returns of 1,350%, it’s still an impressive growth rate. Considering its consistent growth history, the stock may make you a millionaire if you start with a solid capital amount and it keeps growing at its current or a more compelling rate.

One weakness of this stock is its incredibly bloated valuation. It hasn’t prevented its growth till now, but it’s still a risk factor you should take into account.

A financial stock

goeasy (TSX:GSY) is one of the largest alternative lenders in the country. It has too large a footprint for an alternative financial company, and its 400 locations are comparable to larger regional banks or credit bureaus. Over the years, it has expanded its business model, and while small personal loans were not part of the original business model, they are now the focal point of this business.

From a performance perspective, goeasy has been one of the most rewarding stocks on the TSX. It returned over 970% to its investors via capital appreciation and dividends. The growth has slowed down, and the last five year’s returns were around 310%, but that also includes a massive dip that the stock still hasn’t recovered from.

The current bull market/recovery phase of the stock is reason enough to add this to your portfolio, but there are other positives as well. This includes its 26% discount, attractive valuation, and 2.9% dividend yield.

  • We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if goeasy made the list!

Foolish takeaway

The two stocks have the potential to make you a millionaire in one to two decades, assuming you start with a sizable capital amount and the stocks maintain their historical returns. The risk of these or any other stocks straying from the bullish path gets higher as the holding period gets longer, but their histories and stable business model may augment their performance consistency.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy.

More on Investing

Growing plant shoots on coins

This Growth Stock Has Market-Beating Potential

Here's why Restaurant Brands (TSX:QSR) remains the top TSX growth stock long-term investors should consider for big gains.

Read more »

protect, safe, trust
Dividend Stocks

How to Earn Safe Dividends With Just $10,000

Earn reliable income with relatively safe stocks like Fortis.

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

2 Dividend Stocks to Beat Inflation

These two TSX dividend stocks can be excellent holdings to beat inflation, even as inflation cools down.

Read more »

dividends grow over time
Dividend Stocks

TFSA: Invest $20,000 and Get $860/Year of Predictable Passive Income

Looking for safe passive income that will grow and build wealth inside your TFSA. Check out this four-stock portfolio of…

Read more »

Increasing yield
Dividend Stocks

3 Overlooked High-Yielding Dividend Stocks to Buy Right Now

These three dividend stocks are excellent buys, given their discounted prices and high yields.

Read more »

Dad and son having fun outdoor. Healthy living concept
Dividend Stocks

Married? Have Kids? Grab These 5 CRA Tax Breaks

You can transfer dividend income from stocks like Suncor Energy Inc (TSX:SU) to your spouse and enjoy tax savings that…

Read more »

You Should Know This
Dividend Stocks

Why Claiming CPP at 65 Could Be a Mistake

The CPP pegs the start retirement age at 65, but it's not necessarily the ideal option to start pension payments.

Read more »

Oil pumps against sunset
Energy Stocks

2 Absurdly Cheap Energy Stocks I’d Buy in April 2024

Here's why undervalued TSX energy stocks such as Secure Energy Services should be part of equity portfolio in 2024.

Read more »