Investors eyeing investments for long-term financial goals like retirement should allocate some of their savings toward stocks. Notably, stocks have historically provided superior returns over other investment options, especially in the long run. The key is to buy and hold shares of fundamentally strong companies for years.
While the TSX has several high-quality companies with significant growth prospects, Canadian stocks like goeasy(TSX:GSY), Celestica (TSX:CLS), and Dollarama (TSX:DOL) are the ones offering an optimum balance of growth, income, and stability. Let’s look at the factors that make these stocks a solid investment to retire rich.
goeasy
goeasy, which offers lending services to subprime borrowers, is one of the top stocks to buy now and hold for years. The company has solid fundamentals and a stellar track record of consistently outperforming the broader market indices. Moreover, its management is committed to enhancing shareholder returns through higher dividend payments. These attributes make goeasy a compelling long-term bet to create wealth for retirement.
It’s worth noting that goeasy stock grew at a compound annual growth rate (CAGR) of 33.5% in the last five years, delivering an impressive return of 324.5%. This growth stems from its ability to consistently expand its revenue and earnings at a double-digit rate. Alongside capital gains, goeasy has consistently increased its dividend for years and offers a yield of around 2.4%.
Goeasy’s leadership in subprime lending, geographical expansion, and large TAM (total addressable market) will likely drive its loan portfolio and revenue. Further steady credit and payment performance and efficiency improvements will boost its earnings, dividend growth, and share price.
Celestica
Investors could also consider adding Celestica stock to their retirement portfolio. The company’s stock has skyrocketed over 320% in just one year and is up about 788% in the past five years. Despite this notable gain, Celestica is well-positioned to deliver stellar returns owing to its exposure to high-growth sectors such as artificial intelligence (AI) and electric vehicles (EVs).
The company provides supply chain solutions to original equipment manufacturers (OEMs), and cloud-based and other service providers, including hyperscalers. The ongoing shift towards EVs and smart energy solutions provides solid long-term growth opportunities for Celestica. At the same time, the growing adoption and deployment of AI technology will likely accelerate its growth.
Overall, Celestica’s diversified revenue sources and exposure to high-growth end markets make it a compelling long-term investment that can help you retire rich.
Dollarama
Dollarama is a high-growth and defensive investment. The discount retailer sells a wide range of products at low and fixed prices. This value pricing strategy drives traffic to its stores regardless of economic situations and adds a layer of stability. Thanks to its growing traffic and store base, Dollarama has consistently delivered solid revenues and earnings, driving its share price higher and supporting dividend payments.
For instance, Dollarama stock grew at a CAGR of 23.3%, delivering a return of over 185% in the last five years. Further, Dollarama has returned cash to its shareholders by increasing its dividend 13 times since 2011. Its defensive business model, high growth, and consistent dividend payments make Dollarama a solid stock to buy and hold for years.
In the future, the company’s extensive and growing store base, focus on value pricing, direct sourcing strategy, and product expansion will likely drive its sales and earnings growth, pushing up its share price. Further, management will likely continue to bolster shareholder returns through dividend hikes.
