2 High-Growth Canadian Stocks to Buy Now

High-growth stocks are great but not so great when they come crashing down, which is why today, we’re looking at these two top choices.

| More on:
stocks climbing green bull market

Source: Getty Images

When considering high-growth stocks on the TSX, there are a number of considerations on hand. Growth is great, but only if it lasts. Today, we’ll look at Dollarama (TSX:DOL) and Kinross Gold (TSX:K).

Dollarama and Kinross Gold are two compelling options for investors looking for strong potential returns in the long run. While they operate in very different sectors, both companies offer unique advantages and growth opportunities. Let’s dive into why adding these stocks to your portfolio could be a smart move.

Dollarama

Dollarama stock has been a retail powerhouse in Canada, capitalizing on the growing demand for affordable goods. With its expanding store network and ability to offer low-cost products, Dollarama continues to attract a wide range of consumers, especially during times of economic uncertainty.

In the most recent quarter ending in July 2024, the company posted a solid 7.4% year-over-year revenue growth, reaching over $6 billion in the trailing 12 months (TTM). This steady growth has allowed them to maintain a high operating margin of 25.6%, and an impressive 156% return on equity (ROE). For investors seeking a reliable retail giant, Dollarama stock stands out due to its strong financial performance and growth prospects.

Looking ahead, Dollarama stock is well-positioned to continue benefiting from shifts in consumer behaviour. As inflation remains a concern, more shoppers turn to discount retailers, making Dollarama a natural go-to. The company’s focus on efficient operations and maintaining low costs further enhances its growth outlook. As long as Dollarama stock stays nimble in pricing strategies, Dollarama’s dominance in the Canadian retail market shows no sign of slowing down, thus making it a stable, high-growth stock to consider.

Kinross stock

Kinross Gold offers exposure to a different kind of growth, primarily driven by global market factors like inflation and currency devaluation. Gold has traditionally been a safe haven during economic turbulence. And Kinross stock is one of the top players in this sector.

In the second quarter of 2024, Kinross reported a substantial 39.7% year-over-year growth in earnings, driven by strong gold prices and efficient cost management. With a price-to-earnings (P/E) ratio of 13.51, Kinross offers good value for a company in a defensive sector.

The future outlook for Kinross is also promising. As geopolitical tensions and inflation concerns persist, gold prices are likely to stay strong. Kinross’s strategic investments in higher-grade mines and cost-cutting initiatives have boosted its cash flow, with $1.8 billion in operating cash flow reported in the last 12 months. This ensures that Kinross remains a resilient player — one capable of weathering economic storms and continuing to deliver value for shareholders.

Key considerations

Both companies face challenges within each sector. Dollarama stock must navigate the highly competitive retail landscape, where maintaining low prices while managing rising costs could squeeze margins. Meanwhile, Kinross Gold operates in a volatile sector, where gold prices can fluctuate based on unpredictable global events. Thus leading to potential dips in revenue. For investors, these risks are worth considering. Yet the overall growth trends remain favourable for both companies.

Financially, Dollarama stock’s balance sheet shows some leverage, with a debt-to-equity ratio of 391.24%. Yet the strong cash flow and consistent earnings growth help mitigate concerns. Meanwhile, Kinross stock maintains a more modest debt-to-equity ratio of 31.89%, positioning itself as a financially stable gold producer with solid growth prospects.

Bottom line

Both Dollarama stock and Kinross Gold offer high-growth opportunities on the TSX, albeit in different sectors. Dollarama stock benefits from the continued shift toward discount retail, while Kinross provides a hedge against economic volatility through gold. With strong earnings, solid financials, and promising future outlooks, both stocks are worth considering for a balanced, growth-focused portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Investing

how to save money
Investing

The Best TSX Stock for Canadians to Buy With $1,000 Right Now

iShares S&P/TSX 60 Index ETF (TSX:XIU) could be a great starter investment for new investors in Canada.

Read more »

Canadian dollars are printed
Dividend Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

Toronto-Dominion Bank (TSX:TD) stock could do well in the year ahead.

Read more »

monthly desk calendar
Dividend Stocks

Monthly Income: Top Dividend Stocks to Buy in November

Here are two of the best monthly dividend stocks in Canada you can buy in November 2024 and hold for…

Read more »

hand stacks coins
Investing

A Top TSX Stock to Buy Now for Real Wealth Later

Intact Financial (TSX:IFC) stock is a fantastic dividend-growth play for the next 15 years and beyond.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Thursday, November 14

The U.S. wholesale inflation data and Fed chair Jerome Powell’s remarks about the economy will remain on TSX investors’ radar…

Read more »

Man data analyze
Tech Stocks

3 Reasons Celestica Stock Is a Screaming Buy Now

These three reasons make Celestica stock a screaming buy for long-term investors.

Read more »

profit rises over time
Dividend Stocks

These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

Two Dow Jones stocks are screaming buys but Canadians must hold them in an RRSP or RRIF to avoid paying…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Use Your TFSA to Earn Ultimate Passive Income

If you have a TFSA, then you have the key to creating ultimate passive income. All you need is a…

Read more »