Investing in stocks and holding onto them can help build wealth over the long haul. Thus, when investing for tomorrow, consider investing in Canadian stocks with fundamentally strong businesses and a growing earnings base. These stocks have the potential to increase in value over time and even boost your returns through dividend payments. Against this background, here are three TSX stocks to build lasting wealth.
Alimentation Couche-Tard stock
Investors could consider buying shares of Alimentation Couche-Tard (TSX:ATD) to build lasting wealth. The company operates convenience stores, retails fuel, and provides charging solutions for electric vehicles. Thanks to its defensive business model and ability to consistently grow its sales and earnings, Couche-Tard stock offers stability, income, and growth in the long term.
Notably, Couche-Tard’s top line has grown at a compound annual growth rate (CAGR) of over 6% in the past decade. Moreover, its earnings per share (EPS) grew at a CAGR of 15.2% during the same period. Thanks to its impressive financials, Alimentation Couche-Tard stock has grown at a CAGR of 16% in the past decade, delivering a solid capital gain of about 339%. Moreover, the convenience store operator has enhanced its shareholder value through higher dividend payments.
Looking ahead, the company is poised to benefit from its extensive store base, growth in its mobility services, operational efficiencies, and low-risk business model. Moreover, its strategic acquisitions will likely strengthen its competitive positioning and accelerate its growth rate. In summary, Alimentation Couche-Tard is poised to deliver solid capital gains and consistent income.
Shopify stock
Shopify (TSX:SHOP) is another stock with the potential to create lasting wealth over time. It offers exposure to sectors with secular tailwinds, such as technology and digital commerce, and can help investors leverage the power of compounding and build considerable wealth over time.
This Canadian tech company provides a platform that supports multi-channel commerce. Thanks to the ongoing shift towards omnichannel commerce, Shopify is likely to capitalize on this trend with its unified commerce solutions and deliver solid growth. Despite recent volatility in its stock price due to broader macroeconomic concerns, Shopify’s fundamentals remain strong. The company continues to post impressive revenue growth and is expanding its e-commerce market share.
Shopify focuses on increasing gross merchandise volume (GMV), which directly contributes to higher revenues. Further, its products Shopify Payments and Shopify Capital have seen higher adoption, helping to attract and retain a growing merchant base. Shopify is also targeting global expansion. By entering new markets and offering enhanced marketing tools and sales channels, Shopify is laying the groundwork for sustained growth.
Shopify is transitioning toward an asset-light business model, reducing operational overhead and enhancing profitability. Moreover, Shopify is integrating artificial intelligence (AI) technology into its platform, which is expected to boost efficiency across various aspects of the business, further driving long-term growth and profitability.
Celestica stock
Similar to Shopify, Celestica (TSX:CLS) is another compelling investment in the Canadian tech sector to gain exposure to high-growth areas such as AI. While Celestica stock has gained quite a lot in the recent past, the rally in its shares is far from over.
The spending on AI infrastructure and data centres will likely grow exponentially, driving demand for Celestica’s hardware solutions. This will give a significant boost to its revenue and profitability. Moreover, its Connectivity & Cloud Solutions (CCS) division will see significant growth driven by AI-led demand for servers and storage. The company is also witnessing higher demand for its advanced switches and storage solutions in the networking space.
In addition to AI, the recovery in its industrial business and ongoing momentum in the Aerospace and Defense segment provide a solid base for future growth. Overall, Celestica is a solid investment for investors looking for a growth stock with stellar long-term potential.
