3 Incredible Canadian Stocks to Buy for the Next Decade

These Canadian stocks have the solid growth prospects to deliver exceptional returns over the next decade.

| More on:
Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept

Image source: Getty Images

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.

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool has a disclosure policy.

More on Investing

Golden crown on a red velvet background
Dividend Stocks

Dividend Powerhouses: Canadian Stocks to Fuel Your Portfolio

These two top Canadian dividend aristocrats are some of the top stocks on the TSX to buy now and hold…

Read more »

Dial moving from 4G to 5G
Dividend Stocks

This Undervalued Dividend Stock is Worth Buying Right Now

Want an undervalued dividend stock with long-term potential and a juicy yield? Here's an option you may regret not buying…

Read more »

A worker gives a business presentation.
Dividend Stocks

1 Stock I’m Buying Hand Over Fist in July Despite the Market’s Pessimism

This top dividend stock is going through a rough patch, but don't let that count out all the growth we've…

Read more »

financial freedom sign

2 Stocks With Millionaire-Maker Potential

These two top Canadian stocks are among the best on the TSX, and each has the potential to be millionaire-maker…

Read more »

Piggy bank next to a financial report
Stocks for Beginners

Is It Finally the Right Time to Buy Bank Stocks?

Canadian bank stocks are some of the most secure investments out there, but of them all, this bank stock is…

Read more »

clock time

3 Blue-Chip Stocks Every Canadian Should Own

Want some reliable blue-chip Canadian stocks to buy and hold for the next 10 years? These three stocks are worth…

Read more »

gas station, car, and 24-hour store

ATD Stock: Buy, Sell, or Hold Today?

Let's dive into whether Alimentation Couche-Tard (TSX:ATD) is a buy here, or whether ATD stock could have more risk than…

Read more »

person on phone leaning against outside wall with scenic view at airbnb rental property
Dividend Stocks

2 TSX Stocks Poised to Have a Big Summer

Restaurant Brands International (TSX:QSR) stock and another darling that could be too cheap to ignore this summer.

Read more »