Investors looking for stocks to buy and hold for the next decade could look for companies with solid fundamentals and a growing earnings base. Further, one should focus on buying shares of high-quality companies at reasonable prices. This strategy will help investors to outperform the broader markets and generate above-average returns.
Against this background, here are three incredible Canadian stocks to buy and hold for the next decade.
Stock #1
goeasy (TSX:GSY) stock is a compelling investment for its stellar growth prospects and low valuation. This financial services company provides loans to subprime borrowers. The company’s leadership in the subprime lending space, solid credit underwriting capabilities, and a large addressable market enable it to generate robust sales and earnings and drive its share price.
It is worth noting that goeasy’s earnings per share (EPS) have grown at a compound annual growth rate (CAGR) of 32.2% in the past five years. This growth was led by higher revenues and operating efficiency. goeasy’s revenues grew at a CAGR of 20% in the last five years.
Thanks to its solid financials, goeasy stock has grown at a CAGR of 32.8% in the last five years, delivering a return of over 314%. Furthermore, goeasy is a Dividend Aristocrat and has increased its dividend for 10 consecutive years.
Looking ahead, higher loan originations will likely drive its top line. Further, its diversified funding sources, omnichannel offerings, wide product range, and geographical expansion will likely support sales growth. goeasy’s EPS could continue to increase at a double-digit rate, reflecting benefits from higher revenue, steady credit performance, and improved efficiency.
Shares of this financial services company are trading at a forward price-to-earnings multiple of 10.5, which appears low given its high EPS growth and a dividend yield of 2.5%.
Stock #2
Investors could consider investing in shares of Alimentation Couche-Tard (TSX:ATD). The company operates convenience stores, retails fuel, and offers electric vehicle (EV) charging. Thanks to its resilient business model and ability to drive traffic in all market conditions, Couche-Tard consistently generates solid revenues and earnings, which drives its stock higher.
For instance, ATD’s revenue and earnings have grown at a CAGR of 7.3% and 18.8%, respectively, over the past decade. Moreover, it increased its dividend at a CAGR of 26.6% during the same period. Thanks to its impressive financials, Couche-Tard stock has gained nearly 19% over the past year. Moreover, it has grown at a CAGR of over 18% in the past decade, delivering an overall capital gain of about 434%.
Alimentation Couche-Tard’s value pricing strategy, extensive store presence, expansion of private label products, and improving operational efficiencies will likely support its sales and earnings. In addition, its emphasis on strategic acquisitions will likely expand its store base, drive traffic, and accelerate its growth rate.
Stock #3
Celestica (TSX:CLS) is another solid stock to buy and hold for the next decade. The company’s stock has appreciated over 331% in just one year, outperforming the broader markets by a significant margin. The provider of design, manufacturing, and supply chain solutions is poised to benefit from its exposure to high-growth sectors, including electric vehicles (EVs) and artificial intelligence (AI).
While the short-term slowdown in the EV market could pose challenges for the company in the near term, the momentum in its other businesses will support its growth. Further, the ongoing shift towards EVs and smart energy solutions provides a solid foundation for long-term growth.
In addition, the growing adoption and deployment of AI computing will likely drive the company’s growth. Moreover, strong demand across its commercial aerospace submarkets will likely fuel its Aerospace and Defense revenues. In summary, Celestica’s exposure to sectors with secular tailwinds and diversified revenue sources position it well to generate solid growth over the next decade.
Celestica stock is trading at forward price-to-earnings multiple of 17.7, which is low considering its high EPS growth rate.
