Resilience best describes Canada’s equities market. The TSX endured massive headwinds until the Bank of Canada started its rate-cutting phase. Moreover, the rate actions lower volatility and boost investors’ confidence.
CES Energy Solutions (TSX: CEU) and Blackline Safety (TSX: BLN) stand out in 2024. Both growth stocks have delivered enormous gains and have the potential for strong, long-term returns. You can invest $5,000 in either name and hold for the long haul.
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Growth in a growing marketplace
CES Energy Solutions outperforms the broad market (+19.23%) and the energy sector (+13.74%) year to date. At $8.98 per share, current investors are pleased with the 164.13% return on top of the modest 1.32% dividend. The overall return in three years is an eye-popping 366.12%.
Know that CES Energy is ranked fourth in the 2024 TSX30 List, the flagship program for Canada’s top-performing stocks. The $2.06 billion company provides technically advanced consumable chemical solutions to North America’s oil and natural gas producers. The solutions (drilling fluids) are critical throughout the life cycle of the oilfield.
In addition to its core business, CES provides environmental and drilling fluids waste disposal services as well as trucks and trailers to transport drilling fluids. Its vertically integrated consumables business model is asset-light and generates significant free cash flow (FCF) through all points of the cycle. The growing, recurring production chemical revenue streams adds stability.
Management said CES is growing in a growing marketplace. In addition, the exposure to the region’s oil and gas industry and related water production stabilizes FCF free generation. The company is well-positioned to meet the increasing drilling fluid chemical requirements.
The financial results in the last nine quarters indicate strong financial momentum. In the third quarter (Q3) of 2024, revenue climbed 13% year over year to a record $606.5 million, while net income increased 21% to $46.6 million compared to Q3 2023. FCF reached $40.1 million during the quarter.
CES Energy maintains a positive outlook, given the global demand trends. The company also anticipates increased service intensity levels from the stable upstream activity. It also expects to benefit from the strengthening commodity prices and the adoption of advanced critical chemical solutions.
Impressive top-line growth
Blackline Safety is a no-brainer buy and continues to attract investors’ attention. In Q3 2024, revenue grew 36% to $33.67 million versus Q3 2024. It’s the 30th consecutive quarter of year-over-year top-line growth for the $530.8 million connected safety technology company.
According to its chief executive officer and chairman, Cody Slater, the top-line growth is the central story, and Blackline is at the front and centre of industrial innovation. The high demand for its industry-leading connected safety products and services drives revenue growth.
At $6.50 per year, the small-cap stock is up 83.1% year to date. Also, had you invested $5,000 a year ago, your money would be $9,672.62. Based on market analysts’ 12-month price forecasts, the upside potential is between 14% and 31%.
Ideal for growth investors
CES Energy Solutions and Blackline Safety are ideal for growth investors. The former is a winning investment, while the latter has barely scratched the surface.
