Investing in fundamentally strong TSX stocks with solid growth prospects can lead to massive returns over the next decade. Moreover, investors should diversify their portfolios and invest in top-quality Canadian stocks to minimize risk and enhance overall returns.
Against this backdrop, here are my five top TSX stocks to buy now for stellar returns over the long term.
Dollarama stock
If you are looking for above-average returns, Dollarama (TSX:DOL) stock is worth considering. This discount retailer consistently delivers stellar growth led by its value pricing strategy. Thanks to its solid financials, low-risk business model, and high growth, Dollarama is poised to outperform the broader markets and deliver considerable returns.
Dollarama stock has grown at an average annualized growth rate (CAGR) of about 24% in the last five years. In addition to solid capital gains, Dollarama has increased its dividend payments 13 times since 2011. This momentum is likely to be sustained. Its low pricing, extensive store base across Canada, and operational efficiency will drive its financials and share price.
Celestica stock
Celestica (TSX:CLS) is another solid bet worth buying for the next 10 years. The company, which provides supply chain solutions, has rallied about 540% in the past five years, owing to its exposure to high-growth sectors such as artificial intelligence (AI). Despite this massive rally, the stock has significant upside potential.
The ongoing investments in data centre infrastructure will likely drive demand for Celestica’s hardware platform solutions and support its revenue and earnings. Moreover, the continued momentum in its Aerospace and Defense segment will support its growth. Celestica stock has recently witnessed a pullback, providing an opportunity to buy.
Aritzia stock
Shares of luxury clothing maker Aritzia (TSX:ATZ) are poised for solid growth and to deliver massive returns. Aritzia has grown its revenue and adjusted net income at a double-digit rate over the past several years. Its growth rate is likely to accelerate, driven by the expansion of its boutiques in high-demand areas.
Further, its focus on new designs and assortments, expansion of omnichannel offerings, and investments in supply chain and technology provide a solid base for future revenue and earnings growth. The clothing retailer’s top line is forecasted to increase by 15-17% annually through fiscal 2027, while its EPS growth could remain strong, supporting its share price.
goeasy stock
goeasy (TSX:GSY) is a must-have stock to generate massive returns. Thanks to its double-digit growth in earnings and revenue, shares of this financial services company have consistently outperformed the broader equity markets. For instance, the stock has gained about 268% in five years. The company has also enhanced its shareholders’ value with higher dividend payments.
goeasy could continue to grow its financials at a breakneck pace driven by higher demand, a large addressable market, and its leadership in Canada’s subprime lending space. Further, geographical expansion, diverse funding sources, and new product launches will accelerate its growth rate.
goeasy’s growing consumer loan portfolio, solid credit underwriting capabilities, and operating efficiency will bolster its earnings. This will boost its stock price and support higher dividend distributions.
Canadian Natural Resources stock
Investors could consider Canadian Natural Resources (TSX:CNQ) for its ability to generate solid capital gains and pay higher dividends. Its stock has grown at a CAGR of about 28% in the last five years, delivering a capital gain of 246%. Moreover, it enhanced its shareholders’ value by increasing its dividend at a CAGR of 21% in the last 24 years.
The oil and gas company’s high-value reserves, long-life assets, and focus on lowering operating costs will likely drive its earnings and support its stock price in the upcoming years. Further, CNQ’s solid balance sheet and low maintenance capital requirements bode well for growth.
