With Canadian stocks hitting new peaks in 2024, conservative investors are approaching the market more cautiously, making it tougher to identify stocks that might continue their upward momentum. But if you’re following the Foolish Investing Philosophy with a long-term mindset, there are still some high-quality picks on the TSX with the potential for solid returns. If you have $20,000 to invest, buying such stocks now could help you grow your wealth in the years to come.
In this article, I’ll highlight two of the best Canadian stocks you can consider right now to make the most of your $20,000 investment in today’s market.
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Aritzia stock
After witnessing 42% value erosion in the previous year, Aritzia (TSX:ATZ) stock has already jumped by roughly 60% so far in 2024. With this, ATZ stock currently has a market cap of $4.9 billion as its stock trades at $43.66 per share. This Vancouver-headquartered apparel designer and retailer is making a remarkable comeback as consumer confidence strengthens and the company expands its reach.
Last month, Aritzia announced its upbeat financial results for the second quarter (ended in August) of its fiscal year 2025. During the quarter, its sales climbed 15.3% YoY (year-over-year) to $615.7 million, supported by strong U.S. sales growth of nearly 24%. This boost came from the company’s expansion strategy focused on high-traffic locations and an acceleration in its e-commerce sales, which contributed 30.9% of total revenue. As it continued to improve customer experience amid expansion, Aritzia generated $24.5 million in adjusted net profit in the August 2024 quarter, significantly higher than a profit of $3.4 million in the same quarter of the previous year.
Looking ahead, Aritzia plans to open several more boutiques, mainly in the U.S., a market that now makes up over half of its total revenue. This international expansion, along with digital upgrades like an enhanced website, should help the company accelerate its financial growth trends. This is one of the key reasons why I expect ATZ stock to continue outperforming the broader market by a wide margin in the years to come.
Air Canada stock
Unlike Aritzia, Air Canada (TSX:AC) stock hasn’t seen much appreciation in 2024, even as the broader market has rallied. AC stock currently has a market cap of $6.7 billion as its stock trades at $18.78 per share without any notable change on a year-to-date basis. This underperformance is partly due to investor fears that a potential economic downturn could dampen demand for travel, putting pressure on Air Canada’s financials.
Despite these concerns, however, Air Canada’s recent financial growth trends have shown positive signs, especially as the airline industry continues its spectacular post-pandemic recovery. In the second quarter 2024, the largest Canadian passenger airline company posted a 1.7% YoY rise in its total revenue to $5.5 billion, with high demand across its domestic and international routes. Higher revenue, along with its cost control efforts, helped it report adjusted quarterly earnings of $0.98 per share, exceeding Bay Street analysts’ expectations of $0.92 per share.
As Air Canada continues to rebuild its network and capture increased travel demand, its financial growth could improve further. Considering that, the recent weakness in its share prices could be an opportunity for long-term investors to buy this quality stock at a bargain.
