The Canadian equity markets are upbeat this year, with the S&P/TSX Composite Index rising by 21.4%. Interest rate cuts, easing inflation, and optimism over Donald Trump’s victory have driven the equity markets higher. Amid improving optimism, investors can buy these three under-$50 Canadian stocks to earn superior returns in the long run.
Savaria
Savaria (TSX:SIS), which offers accessibility solutions for the physically challenged, is up 53.3% this year. Solid performances and organic and inorganic expansions have boosted its stock price. In the first nine months, the company’s top line has grown by 3.9% to $644.4 million amid 4.6% organic growth and 1.2% favourable foreign exchange. However, the divestment of its vehicle operations in Norway offset some of the growth.
Meanwhile, its operating margin has expanded 130 basis points to 9.4% while its operating income has grown by 19.2%. The company generated an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $118.4 million, representing a 24.6% increase. Besides, it generated $85.9 million of cash from its operations, which the company has utilized to make strategic acquisitions, lower its leverage, and pay dividends and interest. The mobility and accessibility leader has strengthened its financial position, with its net adjusted EBITDA-to-net debt multiple falling to 1.7 compared to 2.1 at the beginning of this year.
Moreover, the demand for accessibility solutions is rising amid an aging population and increasing income levels. Given its comprehensive product line across accessibility and patient care segments, the company could benefit from the addressable market expansion. It also continues with its “Savaria One” initiative, expanding its market share, improving operational and productional throughput, and boosting procurement and supply chain efficiencies. Amid these growth initiatives, management hopes to achieve $1 billion in revenue with an EBITDA margin of 20% next year. So, I expect the uptrend in Savaria’s stock price to continue.
Hydro One
Second on my list would be Hydro One (TSX:H), a pure-play electric transmission and distribution company with no exposure to commodity price fluctuations. The company has been growing its rate base at an annualized rate of over 5% for the last five years. Given its low-risk, rate-regulated business, the company generates stable and predictable cash flows, thus allowing it to reward its shareholders with consistent dividend growth. Since 2017, the company has raised its dividends at an annualized rate of 5% and currently offers a forward dividend yield of 2.8%.
Further, Hyrdo One is continuing with its $11.8 billion capital expenditure plan, which would grow its rate base at an annualized rate of 6% through 2027. Also, favourable rate revisions and cost-cutting initiatives could support its financial growth in the coming years. Amid these growth initiatives, the management projects its EPS to grow at an annualized rate of 5–7%. Also, management hopes to raise its dividends at an annualized rate of 6% through 2027, thus making it an excellent buy.
Lightspeed Commerce
My final pick would be Lightspeed Commerce (TSX:LSPD), which also posted an impressive second-quarter performance in fiscal 2025. Its revenue grew by 20% amid customer base expansion and expanding ARPU (average revenue per user). Its ARPU has grown 24% year-over-year amid its Unified POS and Payments offering and higher GTV (gross transaction value) customer adoption. Supported by top-line growth and cost reduction initiatives, its net losses declined from $42.5 million in the previous year’s quarter to $29.7 million.
Moreover, the growth in the omnichannel selling model has created long-term growth potential for Lightspeed Commerce. Further, the company continues to launch innovative products to meet the growing needs of small- and medium-scale enterprises. Besides, its United POS and Payments offering has increased the adoption of its Payments platform, thus supporting its growth. Despite its healthy growth prospects, the company trades at 2.3 times analysts’ projected sales for the next four quarters, making it an enticing buy.
