Investing in fundamentally strong stocks can help generate significant capital gains in the long term. However, investors should focus on diversifying their portfolios to spread risk and consider investing in shares of companies that can deliver durable revenue and earnings growth.
So, if you plan to invest $1,000 in stocks in March 2024, consider investing in these top TSX stocks now.
Lightspeed Commerce
Down about 36% from the 52-week high, Lightspeed Commerce (TSX: LSPD) stock offers significant value near current levels. Shares of this technology company will likely benefit from the ongoing digital shift, which will drive demand for its products. Further, the increase in its high-value customer base will likely drive its average revenue per user, reduce its churn rate, and cushion its margins.
The growing adoption of its unified suite of tools, improvement in gross payment volumes, and lower cash burn positions it well to deliver sustainable earnings in the long term. Meanwhile, the company’s focus on strategic acquisitions will likely expand its customer locations and drive revenues. Lightspeed stock trades at a forward enterprise value/sales multiple of 1.3, which is too cheap to ignore and provides a good entry point.
goeasy
Speaking of top TSX stocks, investors could consider investing in the shares of financial services company goeasy (TSX: GSY). It provides loans to subprime borrowers and has been growing rapidly. For instance, its top and bottom lines have consistently grown at a solid double-digit rate for the past decade. Thanks to its strong financial performance, goeasy stock has gained about 336% in five years, outperforming the broader equity markets by a wide margin. In addition, goeasy has raised its dividend for nine consecutive years.
goeasy’s omnichannel offerings, large lending market, geographic expansion, and diversified funding sources position it well to grow its loan portfolio and deliver strong top-line growth. Meanwhile, leverage from higher sales, solid credit performance, and efficiency improvements will likely cushion its earnings and support higher dividend payouts.
Dollarama
Dollarama (TSX: DOL) stock offers a unique mix of stability, growth, and income, making it a compelling long-term bet. The company provides everyday essentials at low and fixed price points, making Dollarama a go-to destination for value-conscious shoppers and adding resilience to its business model. While operating a low-risk and defensive business, Dollarama continues to deliver solid revenue and earnings. Moreover, it has consistently increased its dividends for the past decade.
Dollarama stock has more than doubled in three years and delivered capital gains of about 656% in the past decade. Looking ahead, Dollarama’s value pricing strategy, extensive network of stores in the domestic market, international expansion, direct sourcing strategy, and efforts to lower merchandise costs augur well for long-term growth.
Brookfield Renewable Partners
Brookfield Renewable Partners (TSX: BEP.UN) is an appealing investment opportunity to capitalize on the ongoing transition toward renewable energy sources. While higher interest rates posed short-term challenges for the renewable energy sector, Brookfield’s highly diversified assets base, installed capacity of almost 33,000 megawatts, and development pipeline of approximately 155,000 megawatts position it well to capitalize on the growing adoption of clean energy.
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The company will likely benefit from its growing power-generation capabilities and power-purchase agreements with protection against inflation. Besides capital gains, investors will likely gain from the company’s commitment to return cash to its shareholders. The company has consistently increased its dividend for years. Further, it plans to grow its dividend by 5-9% in the coming years.
