Starting to invest as early as possible and looking for the top TSX stocks to buy now can be incredibly important when you consider the power of compound interest.
However, many investors make the mistake of looking for the hottest stocks to buy today rather than the best businesses altogether.
When investing for the long haul, finding the best possible businesses is essential because it allows you to buy and hold with confidence for years to come, taking full advantage of the power of compounding instead of consistently looking for the hottest stocks and trying to time the market to figure out when the best time to buy is.
So, with that in mind, if you’re looking for some of the top TSX stocks to buy now and hold for the next decade, here are my five top picks.
Two massive Canadian growth stocks that aren’t slowing down anytime soon
Despite the fact that Dollarama (TSX:DOL) is trading just off its 52-week high, it’s easily one of my top TSX stocks to buy right now because of its incredible business model and track record of not just rapid but also consistent growth.
In fact, over the last decade, Dollarama has earned investors a total return of 787% or a compounded annual growth rate (CAGR) of 24.4%.
That is incredible growth and shows what a high-quality company Dollarama is. It doesn’t just have a solid business model that can grow both in recessions and when the economy is growing, but Dollarama has also consistently found ways to improve its merchandising and draw more shoppers into its stores.
Plus, in addition to Dollarama, Alimentation Couche-Tard (TSX:ATD) is another stock with a long track record of consistent growth that can continue to expand its operations over the next decade.
In the past 10 years, the convenience store and gas station operator has earned investors a total return of 470% or a CAGR of 19%.
Couche-Tard has operations in countries all over the world, helping to diversify its operations and mitigate some risks. Furthermore, it’s done an impressive job of growing both by acquisition and organically in order to consistently improve both its sales and profitability, making it one of the top TSX stocks to buy now and hold for the next decade.
Three of the best up-and-coming TSX stocks to buy right now
While Dollarama and Couche-Tard have been growing rapidly for more than a decade now, one of the best growth stocks today that has been growing at an unbelievable pace the last few years is goeasy (TSX:GSY).
In fact, the specialty finance stock has earned a total return of 290% over the last five years, or a CAGR of 31.2%.
goeasy’s business model is slightly riskier than that of big banks since it offers loans to consumers with lower credit ratings who typically can’t get a loan from a traditional bank.
However, that additional risk means it can charge more interest on its loans. And since goeasy consistently manages its risks extremely well, its return on equity is much higher than the banks, leading to significant profitability and rapid growth.
Brookfield Renewable Partners (TSX:BEP.UN) is another top TSX stock to buy right now as the world experiences a significant, decades-long shift to cleaner energy sources, especially since Brookfield is one of the largest companies in the world, helping to lead the charge.
The company has a massive, global portfolio of diversified clean energy assets, plus an impressive management team with a track record of constantly finding undervalued assets or projects. This has led to consistent growth both in the share price as well as the stock’s distribution, which currently yields roughly 5.8%
Finally, WELL Health Technologies (TSX:WELL) is another top TSX stock to buy now and hold for the next decade.
Despite its share price struggling to gain value in recent years, its operations continue to expand. In fact, in the last five years, its revenue has grown at a CAGR of 136%, and it’s already profitable, generating normalized earnings per share of $0.22 in 2023.
Therefore, with more growth potential ahead of it and WELL trading at a forward price-to-earnings ratio of just 15 times today, it’s easily one of the top TSX stocks to buy right now.
