Best Canadian Stocks for Enduring Wealth: My Top Picks

These Canadian stocks have solid growth potential and will likely generate above-average returns in the upcoming years.

| More on:
Canada day banner background design of flag

Source: Getty Images

Investors aiming to build enduring wealth should look for fundamentally strong stocks capable of consistently outperforming the market over the long term. Moreover, they should focus on diversifying their portfolios to reduce risk.

Against this backdrop, let’s look at four Canadian stocks that are my top picks for investors seeking enduring wealth in the coming years. These stocks have solid growth potential and will likely generate above-average returns in the upcoming years.

goeasy

Shares of financial services company goeasy (TSX:GSY) are a must-have to build enduring wealth. Thanks to its solid financials, goeasy stock has consistently outperformed the broader equity markets with its returns.

For example, goeasy stock has gained over 56% in one year, 305% in five years, and about 900% in the past decade. Besides delivering massive capital gains, goeasy stock enhanced its shareholders’ value with higher dividend payments.

The momentum in goeasy’s business will likely sustain, driving its stock price higher. Its leadership in Canada’s subprime lending, large addressable market, increasing geographical footprint, diverse funding sources, and new product launches will drive its top line. Meanwhile, higher sales, solid credit underwriting capabilities, steady credit performance, and operating efficiency will help goeasy deliver double-digit earnings growth, boosting its share price and supporting higher dividend payments.

Aritzia

Aritzia (TSX:ATZ) is another compelling stock with the potential to deliver stellar returns over the long term. Shares of this luxury clothing company have appreciated about 90% in one year. Despite the significant move, the momentum in Aritzia stock is likely to continue due to its ability to deliver stellar sales and earnings growth.

Notably, Aritzia’s net revenues have increased at a compound annual growth rate (CAGR) of 19% since fiscal 2016. Moreover, its adjusted net income has increased at a CAGR of 13% during the same period. The company’s management expects net revenue to expand at a CAGR of 15 to 17% through fiscal 2027, which will cushion its earnings and drive its stock price higher.

The clothing retailer is taking initiatives to boost its revenues. The company is opening new boutiques, expanding its omnichannel offerings, and enhancing brand awareness, which will drive its sales. Additionally, Aritzia’s investments in technology, supply chain improvements, and targeted marketing efforts augur well for growth and support the upward trajectory of its share price.

Dollarama

Dollarama (TSX:DOL) is a discount retailer offering products at low and fixed prices. This approach attracts a diverse customer base, driving steady sales even amid economic downturns. Its low-risk business model and value-pricing strategy will likely fuel its earnings, ensuring solid capital gains and steady dividend income for investors.

Dollarama stock has jumped over 173% in the past five years and grown at a compound annual growth rate of about 22% in the same period. In addition to stock appreciation, Dollarama has increased its dividend payments 13 times since 2011, reflecting its commitment to rewarding shareholders.

Its extensive store base across all Canadian provinces, low pricing, and wide product assortment are likely to drive revenue growth. Further, its direct sourcing and operational efficiency are expected to boost earnings, drive higher dividend payments, and fuel the share price.

Celestica 

Celestica (TSX:CLS) is a solid long-term bet. Shares of Celestica, which provides supply chain solutions, have rallied over 698% in the past three years. Despite this massive rally, the stock has significant upside potential, implying it is a buy on the dip.

The company is set to benefit from its exposure to high-growth sectors such as artificial intelligence (AI), which is expected to provide a solid base for future growth.

The large investments in data centre infrastructure of the company’s hyperscale customers and solid demand for its hardware platform solutions will likely support Celestica’s revenue and earnings. In addition, the continued momentum in its Aerospace and Defense revenue, led by commercial aerospace and new program ramps in defence, is positive and will likely support its growth.

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 Aritzia. The Motley Fool has a disclosure policy.

More on Investing

A man smiles while playing a video game.
Retirement

Retired Canadians: The Smartest Income Stocks to Buy With $5,000

TD Bank (TSX:TD) stock stands out as a dividend stock steal at these prices.

Read more »

Target. Stand out from the crowd
Investing

3 Stocks to Buy and Hold for the Next 10 Years

These Canadian stocks have potential to deliver significant returns over the next 10 years and diversify your portfolio.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

How to Use Your TFSA to Earn $5,000 Per Year in Tax-Free Income

Are you looking for ways to earn $5,000 in TFSA passive income? Consider rebalancing your portfolio, shifting $20,000 to these…

Read more »

money cash dividends
Dividend Stocks

Dividend Powerhouses: Top Canadian Stocks to Enhance Your Portfolio

Three TSX dividend powerhouses are the top options for Canadians looking to enhance their investment portfolios.

Read more »

HIGH VOLTAGE ELECRICITY TOWERS
Investing

1 Safe Canadian Utility Stock Offering a Secure Yield

Hydro One (TSX:H) stock looks like a worthy bet as the tides get somewhat rougher in Q4 2024.

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

The Best Stocks to Invest $2,000 in Right Now

Do you have some extra cash to invest this month? Here are two value-priced dividend stocks to buy for a…

Read more »

Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks
Dividend Stocks

TFSA: Can You Really Invest $95,000 Tax-Free?

You can, in fact, hold TSX stocks like Alimentation Couche-Tard Inc (TSX:ATD) tax-free in a TFSA. But can you hold…

Read more »

young woman celebrating a victory while working with mobile phone in the office
Investing

TFSA: 4 Canadian Stocks to Buy and Hold Forever

TFSA investors can expect to generate above-average capital gains from these fundamentally strong Canadian stocks.

Read more »