3 TSX Growth Stocks That Show No Signs of Sinking

These three growth stocks may already be up by over 40% in 2024, but don’t let that scare you off from jumping on board!

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published October 7, 2024 3:30 pm EDT

Growth stocks that have gained momentum year to date are like hopping onto a fast-moving train. It’s a little risky, but you’re joining the ride while it’s still gaining speed! These companies often benefit from strong earnings, innovative breakthroughs, or favourable market trends, which can drive stock prices higher. By investing in them now, you have the potential to capture further upside as they continue to build on their success, thus making it an exciting way to ride the wave of market optimism. Just be sure to hang on tight with these three!

Gildan Activewear

Gildan Activewear (TSX: GIL) has seen a rise of over 40% year to date, driven by solid earnings growth and strategic initiatives that continue to build investor confidence. In the most recent quarter, Gildan reported revenue of $862 million, up 2.6% year over year, and exceeded earnings expectations with an earnings per share (EPS) of $0.74, beating analysts’ estimates. This performance reflects Gildan’s strong operational efficiency, as seen in its improved gross margins and robust cash flow. This allowed the company to return $182 million to shareholders through dividends and share repurchases.

Management’s focus on their Gildan Sustainable Growth Strategy has been a major factor in this growth. Chief Executive Officer (CEO) Glenn J. Chamandy emphasized the company’s competitive strength and long-term vision, highlighting a three-year outlook that promises further success. Additionally, analysts are optimistic about Gildan’s future, with price targets raised by firms like Stifel Nicolaus. This combination of solid financials and forward-looking strategy is why Gildan is showing signs of continued growth.

Keyera

Keyera (TSX: KEY) has surged by over 40% year to date thanks to strong financial performance and an optimistic outlook. In its latest earnings report, Keyera posted impressive revenue growth, with second-quarter 2024 sales reaching $1.72 billion, up from $1.5 billion the previous year. The company’s ability to exceed earnings expectations, reporting $0.62 EPS compared to the forecasted $0.54, highlights its strong operational efficiency. This, coupled with its disciplined capital investments and strategic infrastructure development, has positioned Keyera to benefit from ongoing demand for energy infrastructure services.

Looking ahead, Keyera shows signs of continued growth. Management has emphasized their focus on increasing shareholder returns, as reflected in the dividend increase to $0.52 per share. The company is also seeing positive momentum in its marketing segment and expects strong free cash flow generation for the rest of 2024. That’s due to lower capital spending. CEO Dean Setoguchi expressed confidence in Keyera’s ability to deliver long-term value, particularly with its role as a key player in the energy sector, which is essential for basin volume growth.

Manulife

Manulife Financial (TSX: MFC) has seen an impressive rise of over 40% year to date, fuelled by strong financial results and solid growth across key markets. In its second-quarter earnings report for 2024, the company posted core earnings of $1.7 billion, a 6% increase compared to the previous year. This strong performance was backed by higher-than-expected EPS of $0.91, beating analyst estimates by $0.27. Notably, Manulife’s operations in Asia continue to be a significant driver of growth, with a 40% jump in core earnings in the region. The company’s focus on expanding its business through strategic initiatives like the largest UL reinsurance transaction in Canada further solidifies its path to sustainable growth.

Looking ahead, Manulife is showing clear signs of continued momentum. Management highlighted the company’s strong capital position, with a LICAT ratio of 139%, and its ongoing share-buyback program. This aims to repurchase 90 million shares, representing over $3 billion in returns to shareholders. With a 15.7% core return on equity (ROE) and a 15% rise in book value per share, Manulife is well-positioned to keep delivering value to investors. CEO Roy Gori expressed confidence in the company’s ability to execute its strategy, citing continued growth in key segments like Global Wealth and Asset Management and new business value.