Investing in stocks can help achieve significant capital gains over time. Historically, companies with solid fundamentals and the ability to deliver profitable growth have consistently outperformed the benchmark index and many other asset classes, delivering impressive returns.
Further, investors should diversify their portfolios to lower risk and maximize their long-term growth potential.
Against this backdrop, let’s look at the three best Canadian stocks to buy now. These stocks can deliver above-average returns and create significant wealth for their shareholders.
Dollarama
Dollarama (TSX:DOL) is one of the best TSX stocks, offering growth, stability, and income in the long term. This value retailer sells products at a low, fixed price point. This strategy consistently drives value-conscious shoppers to its stores and enables the company to grow its earnings in all market conditions.
Thanks to its defensive business model, profitable growth, and steady performance, Dollarama stock consistently generates solid returns and outpaces the broader index. For instance, Dollarama stock has grown at a compound annual growth rate of over 22% in the past five years, delivering capital gains of approximately 174%.
Besides its solid capital gains, Dollarama enhanced shareholders’ value through higher dividend payments.
Dollarama’s value pricing, extensive store base in Canada, direct sourcing, and focus on improving operational efficiency and productivity position it well to deliver profitable growth. Moreover, the retailer could continue to reward its shareholders with higher dividends.
goeasy
goeasy (TSX:GSY) is a top Canadian stock to buy now. Shares of this subprime lender have consistently delivered solid gains, beating the market averages by a wide margin. For example, goeasy stock is up 49% in one year. Moreover, it has risen at a compound annual growth rate (CAGR) of more than 32% in the last five years and generated capital gains of nearly 307%.
In addition, goeasy has consistently raised its dividend during this period, showing its commitment to enhancing its shareholders’ value.
goeasy’s outperformance stems from its solid financials. Its top and bottom lines sport a CAGR of over 20% and 28%, respectively, in the past five years. For the first six months of 2024, goeasy’s revenue increased by 25%. At the same time, its adjusted earnings per share jumped by 24%.
This momentum in goeasy’s business will likely be sustained, driven by a large subprime lending market, geographical expansion, diverse funding sources, and product launches. Further, goeasy’s solid credit underwriting capabilities and stable credit performance will cushion goeasy’s bottom line and drive its dividend payments and share price.
Aritzia
Aritzia (TSX:ATZ) is among the best Canadian stocks to own for the long term. This clothing retailer is known for growing its top and bottom lines at a solid pace and delivering attractive capital gains. Aritzia stock has gained about 82% in one year, and the uptrend could be sustained due to the continued growth in its top line and improvement in its earnings before interest, taxes, depreciation, and amortization margin.
Aritzia’s net revenues could grow at a mid-teens rate in the medium term, driven by its multichannel platform, increased brand awareness, and geographic expansion. The company plans to open eight to 10 new boutiques in the U.S. annually through fiscal 2027 and increase its total retail square footage by up to 60% by fiscal 2027, which will drive its sales and earnings. Moreover, the expansion of omnichannel capabilities and investments in technology will support its growth.
Higher sales, full-price selling, supply chain improvements, lower warehousing costs, and productivity savings will likely cushion its margins and support its share price.
