With nearly 9% quarter-to-date gains, the TSX Composite Index remains on track to end its best quarter in over four years. The recent shift in monetary policy by the Bank of Canada and the U.S. Federal Reserve, which includes interest rate cuts, has sparked renewed optimism in the market. As a result, many high-growth stocks on the Toronto Stock Exchange are witnessing buying interest from investors.
If you’re a beginner looking to jump into the market, this could be a great time to consider adding some fundamentally strong stocks to your portfolio. In this article, I’ll highlight two TSX stocks that not only offer strong long-term growth potential but also could be a great starting point for new investors. Let’s begin.
MDA Space stock
Given the current market environment and increasing relevance of the global space sector, MDA Space (TSX:MDA) could be a solid pick for long-term investors. It currently has a market cap of $2 billion as its stock trades at $16.99 per share with about 47% year-to-date gains.
This Toronto-headquartered firm mainly focuses on space robotics, satellite systems, and Earth observation technology, making it a key player in the rapidly expanding global space industry. Whether it’s about building cutting-edge satellites or developing next-generation robotics systems like Canadarm3, MDA is fast emerging as a top company in this innovative space.
In August, MDA reported stellar second-quarter results for 2024, which led to a sharp rally in share prices by boosting investors’ confidence. During the quarter, the company’s total revenue rose 23.5% YoY (year over year) to $242 million, exceeding Street analyst expectations by a wide margin. Its adjusted quarterly earnings also climbed by 12.5% YoY to $0.09 per share.
Even more impressive, MDA’s backlog soared 318% from a year ago to $4.6 billion by the end of the quarter. This backlog included major projects like the $1 billion contract with the Canadian Space Agency for the Canadarm3 program. Considering this strong backlog, MDA’s long-term growth outlook looks really promising, which could help its share prices continue soaring.
Definity Financial stock
Definity Financial (TSX:DFY) is another top TSX stock that beginners and seasoned investors might want to consider right now. This Waterloo-based insurance company currently has a market cap of $6.3 billion as its stock trades at $54.55 per share with 44% year-to-date gains.
Despite the macroeconomic challenges that have affected the growth trends of many financial services companies, Definity continues to perform well. In the first half of the year, the company’s revenue climbed by 9.4% YoY to $2 billion, supported by robust growth in its personal auto and commercial insurance segments.
More importantly, its adjusted earnings in these six months jumped by 44.5% from a year ago to $0.94 per share, driven partly by higher rates and increased unit counts in the personal auto insurance segment. As Definity continues to focus on expanding its broker distribution platform and improving operational efficiencies, its long-term growth outlook remains strong, making this TSX stock look attractive to buy and hold.
