Amid the TSX Composite’s impressive 21.2% year-to-date rally, investors are seeing market sentiment shift dramatically. With inflation cooling and interest rates retreating, Canadian equities have reached new all-time highs. In such a scenario where the market is reaching new record levels week after week, new investors might think it’s too late to find high-growth opportunities. But even as the market reaches new all-time highs, some TSX stocks have the potential to continue delivering extraordinary returns in the coming years.
In this article, I’ll introduce you to two top TSX stocks that could potentially triple in value over the next five years, making them a must-watch for any growth-oriented investor.
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MDA Space stock
With its solid 143% jump so far in 2024, MDA Space (TSX: MDA) has been one of the best-performing growth stocks on the TSX this year, but its growth story is far from over. This Toronto-headquartered global space company currently has a market cap of $3.4 billion as its stock trades at $27.95 per share.
The stellar rise in MDA stock this year reflects a company that’s not merely riding market trends but is well-positioned for sustainable growth in the long run. In the third quarter of 2024, the Canadian space firm posted a 38% YoY (year-over-year) increase in its total revenue to $282.4 million.
This impressive growth in MDA revenue was fueled by increased activity across its business operations, especially in the Robotics & Space Operations and Satellite Systems segments. Notably, its adjusted quarterly EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped by 29.7% from a year ago to $55.5 million, exceeding analysts’ expectations.
What truly stands out about MDA Space is its massive order backlog, which hit an all-time high of $4.6 billion by the end of the third quarter, up 49% YoY. As the company continues to focus on expansion in high-growth areas of the space industry to boost EBITDA further, its share prices could continue rallying.
Air Canada stock
Air Canada (TSX: AC) could be another attractive TSX stock to consider if you’re looking for a high-growth investment that could possibly triple in value over the next five years. After sliding by around 16% in the previous six months, shares of the Saint Laurent-based airline company have jumped over 50% so far in the fourth quarter of 2024. With this, Air Canada stock now trades at $24.69 per share with a market cap of $8.9 billion.
The recent rally in this top TSX stock could partly be attributed to the gradually improving macroeconomic outlook amid easing inflation and falling interest rates, which are boosting consumer confidence and travel demand. Besides that, the ongoing strength in Air Canada’s financial growth trends has further fueled investors’ optimism.
In the first three quarters of 2024 combined, the Canadian flag carrier’s total revenue rose 1.2% YoY to $16.9 billion as travel demand remains strong. Despite some challenges like fluctuating fuel prices and fleet constraints, Air Canada generated $737 million in net cash flow from operating activities in the latest quarter, reflecting a notable increase of $329 million compared to the same quarter of the previous year.
Despite the recent rally in stock, we shouldn’t forget that Air Canada stock is still 49% lower from its pre-pandemic year 2019’s closing level of $48.51 per share. As the largest Canadian passenger airline company continues to benefit from the post-pandemic recovery in the travel industry, I wouldn’t be surprised if its stock surges far beyond this level in the coming years.
