Regularly investing in the stock market is an excellent strategy to take advantage of the underlying volatility associated with the asset class. However, it’s essential to identify a group of companies that have the potential to thrive across business cycles, helping you build long-term wealth.
In this article, I have identified two top Canadian stocks that remain enticing investment options at their current valuations.
Source: Getty Images
Dollarama stock
Valued at $40 billion by market cap, Dollarama (TSX:DOL) has already generated game-changing returns to shareholders. In the last decade, the TSX stock has returned close to 800% to shareholders after adjusting for dividend reinvestments.
In fiscal 2024 (ended in January), Dollarama reported revenue of $5.9 billion, up from $3.8 billion in fiscal 2020. In the last 12 months, its sales have risen by 10.4% year over year to $6.1 billion.
In fiscal Q2 2025, Dollarama increased sales by 7.4% year over year to $1.6 billion, as same-store sales were up 4.7%. In the year-ago period, Dollarama’s same-store sales growth was much higher at 15.5%. In the July quarter, demand for consumable products, primarily everyday essentials, drove the bulk of the increase in same-store sales.
Dollarama has a sizeable stake in Dollarcity, a company with a growing presence in multiple Latin American markets. In Q2, Dollarcity opened 23 net new stores, compared to 10 stores last year. Dollarcity now has 570 stores located in Columbia, Guatemala, El Salvador, and Peru. The pace of new store openings and increasing earnings contribution reflects strong demand in these emerging markets and should be a key driver of future sales.
Analysts tracking DOL stock expect adjusted earnings to expand from $3.56 per share in fiscal 2024 to $4.56 per share in fiscal 2026. Priced at 31.3 times forward earnings, Dollarama stock might seem expensive. However, analysts expect adjusted earnings to grow by almost 15% annually through fiscal 2029.
Alimentation Couche-Tard stock
Alimentation Couche-Tard (TSX:ATD) is a TSX giant valued at a market cap of $70 billion. In the last 20 years, ATD stock has returned over 3,300% to shareholders in dividend-adjusted gains, easily outpacing the broader indices.
The company’s growth story is far from over, given its recently announced plans to acquire GetGo Café Markets from supermarket retailer Giant Eagle. GetGo is a food-first convenience store with roughly 270 stores south of the border.
ATD also confirmed sending a non-binding proposal to acquire Seven & I Holdings, the parent company of 7-Eleven stores, in August. The initial bid amount of US$38.5 billion was revised to US$47 billion this month as the deal would help ATD access several Asian countries. Meanwhile, the company continues to increase its focus on new European markets, including Ireland.
The company emphasized, “In organic network growth we are making notable progress on our 500 new stores and five-year effort. We opened 16 new stores this quarter and are on track to open nearly a hundred in North America this fiscal year.”
ATD continues to report consistent profits and ended the recent quarter with a return on equity of 19.8%. The convenience store operator ended the quarter with $1.6 billion in cash and a sustainable leverage ratio of 2.1 times.
