Investing in top Canadian stocks is a smart way to build wealth over time, as these companies often deliver returns that surpass the average market performance. These companies have solid fundamentals and the ability to consistently grow their profitability, which helps them outshine benchmark indices.
Thus, if you are investing $2,000 right now, here are the four top Canadian stocks with the potential to deliver above-average returns.
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Stock #1
goeasy (TSX:GSY) is one of the top Canadian stocks to consider for its solid growth prospects. This subprime lender has consistently delivered double-digit revenues and earnings growth over the past decade and enhanced its shareholder value through higher dividend payments. Thanks to its strong financials and dividend growth, its stock has appreciated about 920% in a decade.
In the future, goeasy stock could continue to trend higher as the financial services company is well-positioned to capitalize on a growing subprime lending market with its product and geographical expansion. Further, it will likely benefit from a diversified source of funding, high loan demand, and solid credit underwriting capabilities. The company’s strong balance sheet, stable credit performance, and operating leverage will likely cushion its bottom line, drive its dividend payments, and support its share price.
Stock #2
TerraVest Industries (TSX:TVK) is another solid stock worth buying now. The leading industrial manufacturer consistently delivers solid financials that support its share price. For instance, TerraVest stock has gained about 770% in the last five years. While the stock has gained substantially, the higher demand for its services and products suggests that it has more room for growth.
It is well-positioned to benefit from acquisitions and focus on international markets. Further, the momentum in the service segment and growth in its compressed gas distribution equipment augur well for growth. The expansion of its product offerings and improving manufacturing efficiency will likely boost its financials and help the company enhance its shareholder value through dividend payments.
Moreover, TerraVest’s solid balance sheet and ample liquidity suggest that the company could continue to grow its free cash flows through organic growth and acquisitions.
Stock #3
Shares of the Canadian tech company Celestica (TSX:CLS) could be a valuable addition to your portfolio, given its exposure to the high-growth artificial intelligence (AI) sector. Thanks to investors’ optimism over AI, Celestica stock has already risen about 794% in five years, reflecting high demand for its offerings.
Celestica’s hardware solutions segment will continue to deliver solid revenue and profitability led by growing spending on AI infrastructure and data centres. Furthermore, the high demand for its advanced switches and storage solutions in the networking space bodes well for growth. Besides AI, Celestica will gain from the recovery in its industrial business and ongoing momentum in the Aerospace and Defence segment.
Stock #4
Investors could consider Aritzia (TSX:ATZ) stock for its solid growth potential. The company will likely deliver double-digit sales and earnings growth, which could drive its share price. Aritzia stock is up about 84% over the past year, and the uptrend will likely continue, driven by the company’s focus on expanding its geographical footprint.
Notably, Aritzia plans to open new boutiques in the U.S., which will drive its top-line growth, increase brand awareness, and support client acquisition in new and existing markets.
Besides opening new boutiques, Aritzia’s focus on expanding its omnichannel offerings, developing newness across its product assortment, and improving its supply chain will likely support its growth. The company will also benefit from lower warehousing costs and savings from its smart spending initiative, which will cushion earnings and drive the share price.
