The fundamentally strong Canadian companies offering steady dividend income and above-average growth are no-brainer stocks for creating wealth in the long term. Against this background, here are two no-brainer stocks to buy for less than $1,000. These TSX stocks have consistently outperformed the broader markets with their returns and have significant room for further growth.
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Dollarama Stock
Dollarama (TSX:DOL) is a no-brainer Canadian stock for stability, consistent dividend income, and growth. The retailer sells consumer products at low and fixed prices, making it a go-to shopping destination for value-driven shoppers regardless of the economic situation.
Thanks to its defensive business model and value proposition, Dollarama has consistently delivered above-average returns and enhanced shareholder value through dividend hikes, making it one of the top stocks offering growth, income, and stability.
The retailer’s ability to consistently grow its revenues and profitability drives its share price and supports its dividend payouts. Shares of this discount retailer have delivered a 219% return over five years, reflecting average annualized growth of 26.1%. This year, Dollarama stock has gained over 47%, outpacing the Canadian benchmark index by a wide margin. Further, Dollarama has raised its dividend 13 times since 2011.
The Canadian retailer’s ability to increase its transaction volumes and customer base will continue to drive its revenues. Further, Dollarama’s value-based pricing strategy and focus on continued store expansion will likely drive customer traffic and boost its revenue. Moreover, the company’s efforts related to efficient sourcing and reducing costs will likely enhance profitability, supporting higher payouts and boosting its share price.
goeasy
goeasy (TSX:GSY) is another no-brainer TSX stock worth considering. The subprime lender has consistently delivered solid financials and created significant wealth for its shareholders. For instance, goeasy’s top and bottom lines have sported a CAGR of over 20% in the last five years. Thanks to this, its stock has gained approximately 183% over the past five years, outperforming the broader markets.
Furthermore, goeasy has steadily increased its dividend in the previous 10 years, reflecting its commitment to returning value to investors. While goeasy has delivered solid returns, its multiple growth catalysts suggest that the momentum in its stock will likely sustain in the coming years, and it could continue to return higher cash to its shareholders.
The company’s competitive edge lies in its leadership position within the subprime lending market, backed by diversified funding sources and robust credit underwriting practices. As its consumer loan portfolio continues to grow, goeasy is also expanding its product offerings and geographic footprint, positioning itself for sustained revenue growth. Moreover, a strong balance sheet and improved operating leverage provide the foundation for continued growth and will support higher dividend payments.
On the valuation side, goeasy is attractive. Despite its double-digit sales and earnings growth prospects, goeasy trades at a forward price-to-earnings multiple of 8.9, providing a solid buying opportunity. Moreover, the financial services company offers a decent dividend yield of 2.7%.
