3 Canadian Stocks Poised to Double by 2025

Three TSX stocks could benefit from an improved market environment, and break out and double by 2025.

| More on:
dividends grow over time

Source: Getty Images

Prior to the Bank of Canada’s rate cut announcement on June 5, 2024, many Canadian stocks had been outperforming. But with an improved market environment, expect WELL Health Technologies (TSX:WELL), Payfare (TSX:PAY), and Baytex Energy (TSX:BTE) to break out. The three growth stocks are poised to deliver abundant returns by 2025.

Screaming buy

WELL Health is a screaming buy since reporting impressive financial performance for Q1 2024. The $1 billion digital healthcare company is practitioner-focused and provides omnichannel patient services, including electronic medical records (EMR). It is the largest owner and operator of outpatient clinics in Canada.

In the three months ended March 31, 2024, revenue rose 37% year over year to $231.6 million, while net income reached $15.1 million compared to the $14.4 million net loss in Q1 2023. Both results are new records for the company. Notably, the $19.1 million cash flow from operations will enable WELL to fund its organic growth and pursue acquisition plans.  

Hamed Shahbazi, WELL founder and CEO, said the quarterly results exceeded all expectations and showcased robust and efficient technology-driven care delivery platforms. He expects the strong performance to sustain for the rest of 2024 as the company optimizes its operations and profitability. If you invest today, the share price is $4.19 (+8.8% year to date).

Flourishing gig economy

Payfare caters to next-generation workers and helps the gig economy flourish. The $309.7 million global financial technology company provides mobile banking, instant payment, and loyalty-reward solutions to the gig workforce and partners with e-commerce marketplaces and gig platforms like DoorDash, Lyft, and Uber.

In Q1 2024, revenue climbed 23% year over year to a record $51.9 million, while net income soared 296% to $5.1 million compared to Q1 2023. Payfare also launched new programs and finance products, and entered a strategic commercial agreement with Automatic Data Processing to offer Earned Wage Access (EWA) to the Canadian market.

Scoop the stock while the price is only $6.25 (+0.6% year to date). Based on market analysts’ 12-month average and high price targets, the upside potential is between 70.7% ($10.67) and 108% ($13).

Strong cash flow profile

Baytex Energy deserves serious consideration for its relatively cheap price ($4.64) and market-beating return (+6.5% year to date). This mid-cap energy stock is far from mediocre, given the 118.9% overall return in 3 years. It also pays a modest 1.9% dividend.

The $3.9 billion energy company is an oil and natural gas producer operating in the Western Canadian Sedimentary Basin and Eagle Ford in the United States. In Q1 2024, net loss thinned 97.8% year over year to $14 million. Management also executed the company’s largest exploration and development program during the quarter.

Its President and CEO, Eric T. Greager, said Baytex boasts a strong financial position and cash flow profile. Management expects to generate around $700 million in free cash flow (FCF) in 2024. It intends to allocate FCF equally (50/50) to the balance sheet and shareholder returns.

Higher share prices

The S&P/TSX Composite Index recorded an all-time closing high of 22,468.20 on May 21 but did not post new records after the rate cut. However, I won’t be surprised if WELL Health Technologies, Payfare, and Baytex Energy share prices double next year.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Payfare. The Motley Fool recommends DoorDash and Uber Technologies. The Motley Fool has a disclosure policy.

More on Dividend Stocks

HIGH VOLTAGE ELECRICITY TOWERS
Dividend Stocks

Forget Fortis Stock: Buy This Magnificent Utilities Stock Instead

Looking for high dividends and returns? Then I'm sorry, but Fortis (TSX:FTS) stock probably isn't for you.

Read more »

Increasing yield
Dividend Stocks

2 High-Yield (But Slightly Risky) Stocks to Keep Your Eye on

Have these top TSX dividend stocks finally bottomed?

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks I’d Buy if They Fall a Bit

Any near-term decline in these two top Canadian dividend stocks will make them look even more attractive.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Got $3,000? 3 Dividend Stocks to Buy and Hold for the Long Term

You can buy these three Canadian dividend stocks with an investment as low as $3,000 right now and expect to…

Read more »

Gas pipelines
Dividend Stocks

Is TC Energy Stock the Best High-Yield Dividend for You?

TC Energy is up 5% in the past month. Are more gains on the way?

Read more »

Dividend Stocks

Want $250 in Super-Safe Monthly Dividend Income? Invest $46,083.03 in This Ultra-High-Yield Stock

High-yield investments compensate for high risks. However, beaten-down CT REIT (TSX.UN) pays relatively safe, high-yield income streams

Read more »

eat food
Dividend Stocks

2 Top TSX Food Stocks: What to Watch in July

If there is one thing we always need, it's food. And these two food stocks offer growth and many long-term…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Best Dividend Stock to Buy for Passive-Income Investors: Enbridge vs. BCE

Enbridge and BCE now offer high yields. Is one a better pick today?

Read more »