5 Canadian Stocks to Buy Now and Hold for the Next 5 Years

These five Canadian stocks have the potential to deliver above-average returns over the next five years.

Sneha Nahata

Author Bio

Sneha Nahata has been fascinated by the stock market for as long as she can remember. Growing up in a family of investors and stock brokers, conversations about businesses, markets, and investing were part of everyday life. What started as curiosity soon became a lifelong passion and, ultimately, a career. She began her professional journey at Zacks Investment Research, where she developed her analytical skills and gained experience evaluating investment opportunities. Sneha has been writing for The Motley Fool Canada since 2020, helping investors look beyond the headlines to identify long-term investment opportunities. Her work is also featured on Barchart. Sneha’s investing philosophy combines growth and dividend investing, with a focus on finding businesses that can build wealth over the long term. Outside of finance, Sneha enjoys sketching, exploring new creative ideas, and spending time with her family.

Education

Master of Science (M.Sc.) in Finance

Areas of Expertise

Technology stocks, media and telecommunications, banking and financial services, energy stocks, consumer stocks, dividend investing, growth stocks, fundamental analysis, company valuation, and long-term investing.

Social Media Profiles

Barchart author profile

Favorite Investment Quote

"Know what you own, and know why you own it." — Peter Lynch

Published August 15, 2024 3:30 pm EDT

The stock market has been trending higher even in the face of macroeconomic uncertainties. However, many Canadian stocks with fundamentally sound businesses still have the potential to rise further. Factors like expectation of interest rate reductions, increase in consumer discretionary spending, the integration of artificial intelligence (AI) technology, and anticipation of higher corporate earnings are expected to drive Canadian stocks higher.

Against this backdrop, here are five Canadian stocks to buy now and hold for at least five years.

Constellation Software

Constellation Software (TSX: CSU) stock is up about 27% year to date. As a specialized software and services provider, this Canadian tech company stands to benefit from emerging technology trends and likely outperform the broader markets over the next five years. Moreover, its focus on acquiring companies with consistent profitability and above-average growth is expected to act as a catalyst.

CSU stock sports a compound annual growth rate (CAGR) of 29.6% in the last five years. This uptrend will likely sustain driven by its diverse portfolio, growing customer base, and emphasis on tailored software solutions. Additionally, its strategic acquisition strategy will enable it to benefit from emerging trends like artificial intelligence (AI) and digital transformation.

Lightspeed Commerce

Lightspeed Commerce (TSX: LSPD) is another attractive tech stock investors could consider buying and holding for the next five years. The stock has witnessed a significant pullback, and its valuation is near an all-time low. While the stock is trading cheaply, Lightspeed continues to deliver solid growth and is heading towards profitability. This combination of low valuation and solid growth prospects makes Lightspeed an attractive investment.

Lightspeed is well-positioned to benefit from the ongoing digital shift. Further, the demand for Lightspeed’s products will likely increase as businesses increasingly invest in technology to upgrade their payment systems. Moreover, its focus on growing its high-value customers will likely boost its average revenue per user (ARPU), increase customer retention, and drive margins. Overall, Lightspeed is poised to deliver solid growth in the coming years.

Celestica

Shares of Celestica (TSX: CLS), the leader in providing supply chain solutions, have already rallied about 150% in one year. However, Celestica stock has potential for further growth owing to its exposure to sectors with secular tailwinds, such as electric vehicles (EVs) and AI.

The ongoing deployment of AI technology will likely drive demand for Celestica’s offerings in the coming years. Moreover, the demand in the commercial aerospace submarkets is likely to remain strong. While the EV sector is witnessing near-term demand headwinds, the electrification of vehicles and a shift towards green energy provide a solid platform for long-term growth.

goeasy

goeasy (TSX: GSY) is a lucrative stock for its ability to consistently grow its financials at a solid double-digit rate and enhance shareholders’ value through higher dividends. Thanks to its impressive sales and earnings growth, shares of this financial services company have consistently outperformed the TSX. Moreover, goeasy stock is trading cheap on the valuation front, considering its stellar earnings growth, making it a buy near the current levels.

goeasy’s growing loan portfolio, diversified funding sources, steady credit performance, geographical expansion, and operating efficiency will continue to boost its financials, driving its share price and dividend payments. Further, its large addressable market and solid credit underwriting capabilities will augur well for growth.

Dollarama

Given its low-risk business model and ability to consistently grow its sales and earnings in all market conditions, Dollarama (TSX: DOL) is a must-have stock to buy now. Dollarama stock has appreciated about 166% over the past five years. Besides capital gains, Dollarama has uninterruptedly increased its dividend, enhancing its shareholders’ value.

The discount retailer sells products at low and fixed price points. Thanks to its value pricing strategy, Dollarama continues to attract shoppers and drive its financials. Further, its extensive store base, direct sourcing, and focus on driving efficiency will likely bolster its earnings and position it to deliver steady growth.