Here Are My Top 2 Growth Stocks to Buy Now

These two top Canadian stocks both trade cheaply and have years of growth potential, making them two of the best stocks to buy now.

Daniel Da Costa

Author Bio Daniel joined The Motley Fool Canada in 2019 and brings experience in banking, investing, and financial analysis. Growing up as the son of a proprietary stock trader and educator, he developed an early interest in financial markets and a passion for helping Canadians improve their financial well-being. His work spans investment research, economic analysis, and econometric modelling, with a focus on understanding the broader forces that influence businesses, markets, and the economy. As an investor, Daniel looks for high-quality businesses with long-term growth potential, reliable income, and attractive valuations. Outside of finance, Daniel enjoys spending time with his family, playing hockey, running, and sailing. Areas of Expertise Investment research, economic analysis, econometric modelling, banking, financial analysis, business fundamentals, long-term investing, dividend investing, and company valuation. Favorite Investment Quote "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." — Warren Buffett

Published November 20, 2024 8:30 pm EST

When it comes to buying growth stocks, many investors look for higher-risk companies that have the potential to grow extremely quickly. However, as appealing as that may be, these expectations of growth either never last or never come to fruition in the first place, which is why the top growth stocks to buy are ones that can consistently expand their operations for years to come.

Furthermore, when you can buy these consistent growth stocks while they’re trading cheaply, you significantly increase your potential gains over the long haul.

So, with that in mind, here are two of the top growth stocks to buy now while they trade cheaply.

A worker uses a laptop inside a restaurant. — Source: Getty Images

One of the best stocks in a booming industry

There’s no question that green energy stocks are some of the best long-term growth stocks to buy now, and Brookfield Renewable Partners (TSX: BEP.UN) is easily the leader in the space.

We’ve already seen a significant transition to cleaner energy being driven by governments around the world. However, recently, we’ve also begun seeing surging demand from corporate buyers.

This not only gives Brookfield and its industry a significant runway for growth, but Brookfield specifically is well positioned to benefit given its global reach, significant portfolio of assets and access to massive sums of capital.

This capital is essential both for acquisitions and for building out its substantial development pipeline. In fact, right now, Brookfield has an advanced development pipeline of 64.9 gigawatts that it expects to make fully operational over the next six years. That’s nearly double its current installed capacity.

Plus, in addition to the growth potential it offers and the 12% to 15% annual returns that Brookfield targets, it also pays an impressive distribution, which it aims to increase between 5% and 9% each year.

Furthermore, with the growth stock trading cheaply, that distribution has a yield of roughly 5.6% today, making Brookfield a stock you can confidently buy and hold, even if it doesn’t start to rally initially.

However, a rally could come sooner than later as analysts are also bullish on Brookfield Renewables. In fact, its average analyst target price of $43.43 is a more than 20% premium to where it trades today.

So, if you’re looking for high-quality growth stocks to buy now and hold for years to come, Brookfield Renewables is certainly a top choice for Canadian investors.

One of the top growth stocks in Canada to buy now

In addition to Brookfield, another top Canadian growth stock to buy now that’s both undervalued and has significant long-term growth potential is Aritzia (TSX: ATZ), the impressive retail stock.

Despite a slowdown in sales and higher costs as inflation surged a few years back, Aritzia continues to rebound well and show strong execution as investors are used to.

For example, in early October, when it reported results for its second quarter of fiscal 2025, Aritzia reported same-store sales growth of more than 6.5%, as well as e-commerce growth of more than 10%.

Aritzia also generated adjusted earnings per share (EPS) of $0.21 compared to the $0.15 consensus that analysts were expecting.

For the full year in fiscal 2025, Aritzia is now guiding to adjusted EPS of approximately $1.70, which would be an 85% jump from fiscal 2024 and shows Aritzia is well on its way to recovering fully.

Furthermore, in fiscal 2026 (which sounds far off but is really only two quarters away), analysts expect that Aritzia should be able to lower its capital expenditure requirements, which would drive both free cash flow and earnings growth considerably.

In fact, right now, the consensus estimate among analysts for adjusted EPS in fiscal 2026 is $2.44.

Plus, in addition to its significant growth potential, Aritzia is also trading undervalued at just 22.1 times its expected earnings over the next four quarters, well below its five-year average forward P/E ratio of more than 28 times.

So, it’s not surprising that all eight analysts covering Aritzia rate the stock a buy and its $57.94 average target price sits at a roughly 30% premium compared to where the stock trades today.

Therefore, with Aritzia trading cheaply and expected to grow its earnings significantly over the coming years, it’s undoubtedly one of the best growth stocks to buy now.