If you plan to invest for long-term goals such as retirement, consider investing in Canadian stocks with fundamentally strong businesses. These stocks provide stability and have the potential to deliver stellar capital gains over time. Against this backdrop, let’s explore three long-term growth gems that align with the set-it-and-forget-it strategy for a prosperous retirement.
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Dollarama
Dollarama (TSX: DOL) is a perfect stock for investors looking for a dependable investment that offers a blend of stability, growth, and income. This Canadian value retailer’s defensive business model, consistent sales and earnings growth, and commitment to rewarding its shareholders with higher cash make it an attractive investment for generating solid capital gains and reliable income and diversifying your retirement portfolio.
Dollarama’s value pricing strategy and focus on direct sourcing position it well to deliver steady financials in all economic situations. By offering products at fixed and low price points, Dollarama appeals to a broad customer base, ensuring solid sales. Steady sales and operational efficiency support earnings, higher dividend payments, and its shares.
Over the past year, its stock has surged by approximately 41%, easily outperforming the TSX. Looking back over the last five years, Dollarama stock has increased at a compound annualized growth rate (CAGR) of approximately 24%, translating into an outstanding 193% capital gain. In addition, Dollarama has raised its dividend payments 13 times since 2011.
Dollarama’s future looks promising, implying the uptrend in its shares will likely continue. Its low pricing strategy, extensive store base across all Canadian provinces, efficient sourcing of goods, and productivity savings will drive its financials, share price, and dividend payments.
TerraVest Industries
TerraVest Industries (TSX: TVK) manufactures home heating products, anhydrous ammonia, propane, natural gas transport vehicles, fibreglass tanks, and energy processing equipment. The company has been performing well, driving a significant rise in its stock price.
Over the past year, its shares have surged by about 157%, and in the last three years, it has delivered an impressive 302% in capital gains. This strong performance has placed TerraVest among the 30 best-performing companies on the Toronto Stock Exchange (TSX). Additionally, it pays dividends, which is a positive factor.
TerraVest is investing in improving its manufacturing efficiency and expanding its product lines, particularly in markets where it already has a strong presence. With facilities across North America and the ability to serve international markets, the company is well-positioned for continued growth. Its strong balance sheet and liquidity also support its strategy of acquiring other companies, further boosting its growth potential.
Fairfax Financial Holdings
Fairfax Financial Holdings (TSX: FFH) is a holding company specializing in property and casualty insurance, reinsurance, and investment management. Its strong financial performance has consistently increased its stock price, resulting in above-average returns.
Over the past year, Fairfax stock has risen by about 50%. In the last five years, it has gained around 218%, representing an impressive CAGR of 26%.
Fairfax’s ability to increase premiums, maintain solid underwriting practices, and manage a strong investment portfolio will likely support its growth. Looking ahead, the company is well-positioned to continue delivering solid earnings. In addition to growing organically, Fairfax’s acquisitions are expected to expand its market presence in underserved areas, further supporting its growth.
