If you’re considering long-term investing, stocks should be on your radar. Historically, the equity market has outperformed most other asset classes, making it a robust option for building wealth over time. With this background, let’s explore five stocks that are my favourite to buy right now. Notably, these Canadian stocks have solid fundamentals and the ability to deliver profitable growth.
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goeasy
Subprime lender goeasy (TSX: GSY) is one of my favorite TSX stocks to buy right now. Its ability to increase its sales and earnings at a double-digit rate, its consistent dividend increases, and its attractive valuation position it well to deliver above-average returns. The company’s leadership in the subprime lending sector in Canada, its large addressable market, its omnichannel offerings, geographic expansion, and low-cost funding sources should drive its consumer loan portfolio and top line.
Higher sales, steady credit and payment performance, and operating leverage should help expand its margins and bottom line. The company has consistently raised its dividends in the past decade, and its growing earnings base suggests that this trend will be sustained. While goeasy offers high growth and income, it trades at the next 12-month price-to-earnings multiple of 9.8, which is considerably low given the solid EPS growth rate.
TerraVest Industries
TerraVest Industries (TSX: TVK) is another stock likely to outperform the broader market, thanks to the solid demand for its products. Shares of the diversified industrial company have skyrocketed in the past decade and have delivered an enormous gain of about 2,228%, outpacing the benchmark index. Further, the stock is up over 165% in one year and has the potential to keep going.
TerraVest should benefit from its efforts to improve manufacturing capabilities and expand into high-growth markets. Further, its focus on acquisitions and its strong balance sheet should help it accelerate growth and capitalize on opportunities.
Hydro One
Hydro One (TSX: H) offers growth, stability, and income, making it a favorite TSX stock. This utility company focuses on electricity transmission and distribution, which allows it to generate stable earnings and predictable cash flows, supporting higher dividend payments. Further, the company’s strong financials help it to fund its growth initiatives without raising capital from external sources.
Over the medium term, Hydro One projects its rate base to increase by 6% annually. This will drive its low-risk earnings base and support its share price and dividend payouts. Thanks to its resilient business model and higher cash flows, Hydro One projects its earnings per share to increase by 5-7% annually by fiscal 2027. Moreover, it expects to raise its dividend by 6% annually during the same period.
Dollarama
Dollarama (TSX: DOL) is a must-have in your portfolio. This discount retailer sells products at low and fixed prices. Its defensive business model helps it consistently generate solid sales and earnings, regardless of the economy. The company focuses on rewarding its shareholders and has increased its dividend 13 times since 2011.
Dollarama’s value pricing, extensive and growing store base, wide range of customers, focus on direct sourcing, and cost savings will enable the company to consistently grow its sales and earnings, driving its future dividend and share price.
Bombardier
Bombardier (TSX: BBD.B) is one of my top picks. The business jet manufacturer will likely benefit from its new lineup of medium and large business jets, which are in high demand. In addition, its focus on improving profitability and reduction of debt provides a solid base for future growth.
The company has diversified its operations and expanded into defense, services, and the pre-owned aircraft markets, which will likely accelerate its growth and boost profitability. Further, Bombardier is also strengthening its financial position by optimizing its balance sheet and improving liquidity. Overall, the company will likely outperform the TSX in the upcoming years.
