Investing in high-quality TSX stocks can help you build lasting wealth. Notably, companies with well-established businesses, strong fundamentals, and the ability to deliver profitable growth will likely generate above-average returns, contributing significantly to your overall wealth accumulation over time. Moreover, investors should focus on diversifying their portfolios to reduce risk.
So, if you are planning to invest for tomorrow, let’s examine three Canadian stocks with solid growth potential.
Shopify
Shopify (TSX:SHOP) is a top stock for creating wealth in the long term. The Canadian technology giant is poised to capitalize on the ongoing shift towards multi-channel commerce. While macro headwinds have weighed on Shopify stock, which has underperformed the broader markets year-to-date, its long-term fundamentals remain solid, and the company continues to grow its share in online commerce.
The Canadian e-commerce giant focuses on growing its gross merchandise volumes to achieve higher revenues. Further, Shopify’s innovative product offerings, such as Payments and Capital, are witnessing high adoption and are likely to drive its merchant base. The company plans to expand geographically and add new marketing tools and sales channels, which bode well for growth.
With its unified commerce solutions, Shopify will likely benefit from the digital shift. Furthermore, integrating artificial technology (AI) in its offerings and transitioning towards an asset-light business will likely boost efficiency and enable the company to deliver profitable growth.
goeasy
goeasy (TSX:GSY) is an excellent stock for wealth creation. The sub-prime lender is renowned for delivering above-average returns. For instance, goeasy stock has gained over 271% in the last five years, reflecting a compound annual growth rate (CAGR) of about 30%. The company’s ability to deliver double-digit revenues and earnings and its growing consumer loan portfolio are the reasons for its outperformance.
goeasy’s top line sports a CAGR of over 20% over the last five years, while its earnings per share (EPS) grew at about 28% annually during the same period. Besides solid capital gains, goeasy enhanced its shareholders’ value with 20 consecutive years of dividend payments.
goeasy stock is likely to deliver massive returns in the coming years on the back of its ability to grow its sales and earnings at a solid double-digit rate. The company’s leadership in Canada’s non-prime lending sector, large addressable market, geographical expansion, and diverse funding sources will likely boost its revenues. Additionally, its solid credit underwriting capabilities and operating efficiency will bolster goeasy’s earnings growth, driving its dividend payments and share price.
Aritzia
Investors could consider Aritzia (TSX:ATZ) stock for its potential to deliver stellar returns. This clothing retailer has been consistently delivering stellar financials. For instance, since fiscal 2016, its net revenues have grown at a CAGR of 19%. Further, its adjusted net income grew at a CAGR of 13% during the same timeframe. Thanks to its growing financials, Aritzia stock has increased over 177% in the last five years, reflecting a CAGR of 22.6%.
Aritzia plans to open eight to ten boutiques in the U.S. annually through fiscal 2027 and increase the total retail square footage by up to 60%. This will likely boost its sales and earnings. Further, its focus on its e-commerce business, addition of omnichannel capabilities, and supply-chain improvement will likely accelerate its growth rate.
Aritzia’s sales are forecasted to increase by 15% to 17% per year through fiscal 2027. Higher sales and operating leverage will likely bolster its earnings and drive its stock higher.
