Now that its December, you might be tempted to splurge on that new television marked down for Boxing Day. However, why not buy a quality Canadian stock and own a gift that keeps giving for years (and maybe even decades)?
If you choose stocks wisely, they can reward far beyond the life of your television. Likewise, just imagine how many televisions you could buy if your stocks were to multiply by several times?
If you’ve got $2,000 and don’t mind deferring some near-term gratification, these Canadian stocks could be big long-term winners.
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This Canadian stock is in ultra-growth mode
It has been an incredible year already for Propel Holdings (TSX: PRL). This Canadian stock is up 197% in 2024! PRL was driven by a combination of great earnings per share growth and a nice valuation re-rating after the stock was dirt cheap in 2023.
Propel provides small loans to non-prime consumers in the U.S. and Canada. With its specialized A.I. lending platform, the company can quickly scale and expand its service offerings. This Canadian stock has a lot of operating leverage. The bigger it gets, the better its margins become.
Propel has grown earnings per share by a plus-50% compounded annual growth rate (CAGR). If it completes its recently announced U.K. acquisition, it could certainly keep up that pace in 2025. If it keeps executing its growth strategy, this Canadian stock could still be reasonably priced.
A top winner in Canada
Constellation Software (TSX: CSU) trades for almost $4,800 per share. This ultimate Canadian stock has been an incredible compounder for shareholders for years. You don’t want to miss out on the action.
Today, many brokerages offer fractional share purchases so you can afford to buy it, even if you only have $2,000 to spend. However, if you don’t have access to fractional shares, you can buy one of Constellation’s smaller spinout entities, Topicus.com (TSXV: TOI) or Lumine Group (TSXV: LMN).
Both operate vertical market software businesses, and both are serial acquirers. The difference is that Topicus has a unique geographic focus in Europe. Lumine operates software businesses focused on media and telecommunications.
Topicus acquires many smaller businesses. To date, Lumine has focused on larger carve-out opportunities. You can craft your weightings and strategy based on your preference.
You can get access to all these businesses by owning the larger parent company, Constellation. There are likely more spinouts to come in the years ahead. The point is, you want to be a part of the Constellation family in one way or another for the years ahead.
A Canadian industrial stock with more room to rise
Another Canadian stock to add with $2,000 is TFI International (TSX: TFII). It is not a flashy tech stock like the ones above. However, no one can argue with its track record of growing its stock by a 25% CAGR over the past 10 years.
TFI is one of the largest shipping and transportation companies in Canada. It has a growing presence in the United States. Like Constellation, it is a serial acquirer. The freight sector is in a recession. While that hurts TFI’s operating income near term, it can still opportunistically acquire transport businesses at attractive valuations.
TFI has had some operating issues, especially in the U.S. Yet, it continues to generate substantial free cash flow. As result, its balance sheet has remained strong and should support more acquisition growth in 2025.
Like the Canadian stocks above, TFI has a highly invested management team with a strong focus on high returns on investments. It is an ideal boring, industrial stock to hold for the next 5 to 10 years.
