Canadian investors sometimes dream of finding that one growth stock that doesn’t just beat the market – it crushes and obliterates it. For the past decade, TerraVest Industries (TSX:TVK) has been that stock. This multi-bagger stock has delivered jaw-dropping returns of 2,630% over the past 10 years with dividend reinvestment, far outpacing the broader S&P/TSX Composite Index, which gained just 132% during the same period. It could do more.
The market outperformer you need to know
TerraVest Industries stock has been on an incredible winning streak. With a 159.1% return year-to-date in 2024, it has obliterated the TSX’s respectable 20.7% total return. Even over longer timeframes, TVK stock has consistently outpaced the index over multiple time horizons, as shown below:
- 3-year return: 323% (vs. the TSX’s 30.1%)
- 5-year return: 437% (vs. the TSX’s 68.2%)
To put this into perspective, if you had invested $10,000 in TerraVest stock a decade ago, your stake would now be worth over $270,000, compared to just $23,000 with a market-tracking exchange-traded fund (ETF) – like the BMO S&P/TSX Capped Composite Index ETF (TSX:ZCN).
You could have grown $10,000 into more than a quarter of a million!
What drives TerraVest’s growth?
TerraVest Industries manufactures a range of industrial products, including propane transport vehicles, storage vessels, and energy processing equipment. Its success stems from a strong acquisitions-led growth strategy combined with steady organic expansion. Over the past five years, TerraVest’s annual revenue has tripled, climbing from $304 million in 2020 to over $911 million in 2024.
Other notable fundamental performance metrics include:
- Annual revenue growth of 34% year-over-year in 2024
- Gross profit margins have expanded to 28.9% (up from 23.8% in 2020)
- Net income increased by 48% in the Financial Year 2024
The company’s disciplined approach to acquisitions has been key, delivering accretive contributions to earnings and cash flow. This strategy, coupled with operational synergies, has fueled remarkable profitability.
Positioned for future growth
TerraVest isn’t slowing down. With a new credit facility secured in late 2023 and a successful equity offering, the company is well-capitalized to continue expanding. Management expects sustained earnings and cash flow growth in 2025, supported by robust contributions from recent acquisitions and synergies across its portfolio.
Investment analysts are optimistic, forecasting earnings per share growth of 37% for the coming year. The company’s forward P/E ratio of 25 and a PEG ratio of just 0.7 are strong indicators that the stock remains undervalued relative to its growth potential.
A rising dividend growth star?
In December 2024, TerraVest announced a 17% dividend hike, bringing its yield to 0.6% annually. While the dividend may seem modest, it reflects the company’s commitment to enhance shareholder returns while reinvesting for future growth. With a payout ratio of just 10% of distributable cash flow, TerraVest has ample room to increase dividends in the future.
Why 2025 could be TerraVest stock’s year
With TerraVest Industries joining the prestigious S&P/TSX Composite Index this month, the company’s visibility among institutional investors has increased. Its inclusion in the 2024 TSX30 – a list of Canada’s top-performing stocks – underscored its capacity for long-term success and potential market leadership.
As the company continues to deliver record returns and execute its growth strategy, TerraVest remains a compelling pick for investors seeking a Canadian growth stock with both a stellar track record and exciting prospects.
Is TerraVest Industries stock a buy now?
Despite its impressive run, TerraVest Industries still offers potential for significant gains. The company’s blend of strong fundamentals, strategic growth initiatives, and a commitment to shareholder returns makes it a standout stock for 2025.
For investors looking to ride the wave of a proven market crusher, TerraVest Industries deserves serious investment consideration.
The Canadian energy stock has shown it can outperform in any market environment. With strong fundamentals, an undervalued growth trajectory, and a clear path for future expansion, TerraVest Industries remains a top Canadian growth stock for 2025.
