The Canadian stock market continues to deliver for investors, and 2024 has undoubtedly been a strong year for those who have remained fully invested. Growth stocks continue to outperform, and there’s no shortage of investors who think this trend can continue into 2025. With the Bank of Canada and other central banks around the world in cutting mode, there’s a lot to like about investing in companies with market-beating growth rates right now.
For those bullish on the future of higher-growth companies in this market, here are three top Canadian stocks to consider adding in December.
Constellation Software
Constellation Software (TSX:CSU) is a Toronto-based software company renowned for its acquisition-driven growth strategy. The company offers a combination of stability, resilience, and long-term capital appreciation.
Constellation Software has delivered exceptional growth over the past few years, making it one of the best stocks to invest in on the TSX. The company’s long-term compounded annual growth rate in revenue, stock price and earnings has consistently exceeded 20% over the last 10 years. In addition, the company has traditionally focused on North American and European markets, but its recent efforts indicate an increasing focus on global expansion. It helps Constellation mitigate regional economic risks and opens up new opportunities in underpenetrated markets.
While Constellation Software is best known for its acquisitions, the company has focused on doubling down on its organic growth initiatives. This strategy strengthens the company’s ability to drive sustainable revenue increases without over-reliance on external deals. Moreover, post-acquisition, Constellation emphasizes integrating acquired businesses to maximize efficiencies, reduce redundancies, and improve profitability.
Shopify
Shopify (TSX:SHOP) offers a compelling opportunity for investors looking to capitalize on the growth of e-commerce, digital payments, and innovative technologies. As a global leader in commerce solutions, Shopify has established itself as a transformative force in the retail and technology sectors.
Shopify is a key enabler of the e-commerce industry, providing tools to all businesses to establish and grow their online presence. In addition, the global e-commerce market is projected to grow at a compound annual growth rate (CAGR) of 14.7% through 2030. This growth is expected to be driven by increased internet penetration, mobile commerce, and consumer preference for online shopping.
Shopify has showcased remarkable revenue scalability through diverse revenue streams. These business lines span Subscription Solutions, which generates predictable income from recurring merchant fees to Merchant Solutions such as Shopify Payments, Shopify Shipping, and fulfillment services, which now contribute over 70% of total revenue with faster growth than subscriptions. In addition, Shopify’s investment in artificial intelligence (AI) technology enhances merchant capabilities, optimizes sales strategies, and improves operational efficiency, solidifying Shopify’s position as a leader in the e-commerce space.
Boyd Group
Boyd Group (TSX:BYD) is one of North America’s largest operators of non-franchised collision repair centers, with a strong presence in both Canada and the United States. The company benefits from the essential nature of its service, as collision repair is a necessity and is largely unaffected by economic cycles.
Boyd’s strategy of acquiring smaller collision repair shops to integrate the acquired companies into its network has allowed this auto body giant to grow consistently. Moreover, as the auto repair industry remains fragmented, Boyd has ample opportunities for continued consolidation and growth. It has successfully added new locations through acquisitions and organic growth, increasing its market footprint.
Boyd’s business is characterized by predictable demand and recurring revenue, which make it an excellent choice for investors seeking exposure to a defensive growth stock. The company’s ability to maintain profitability during economic downturns adds to its appeal. In addition, the company has demonstrated strong financial discipline and consistently generates free cash flow to support its expansion and shareholder returns.
