As we kick off 2025, investors looking for top growth stocks to buy to potentially diversify or rebalance their portfolios to start the year, coming up with a list of stocks to consider is a great first step.
The good news for Canadian investors looking to put capital to work in their home market is that there are a number of fantastic Canadian growth stocks to consider. Here are three of my top picks right now.
Source: Getty Images
Shopify
I’ve long been bullish on e-commerce platform provider Shopify (TSX: SHOP) for a number of reasons.
First, the company’s status as a leading player in the e-commerce software industry is one that should provide investors with a long earnings growth runway. So long as businesses of all sizes continue to set up shops online, Shopify should be able to carry above-market growth rates for some time, which should lead to share price appreciation for long-term investors.
Additionally, the company’s strategic shift into enterprise markets, as well as Shopify’s integration of artificial intelligence (AI) throughout its platform, are key growth drivers to watch. Yes, this stock is up big from its previous trough, but the company’s valuation is much more attractive than where it was three years ago.
Constellation Software
Another Canadian tech giant in the software realm, Constellation Software (TSX: CSU) is a Canadian tech behemoth valued at a market capitalization of approximately $90 billion that doesn’t get enough love in the markets (in my view).
This software giant has grown to this size via a long-term strategy of acquiring small and medium-sized software firms and rolling them into Constellation’s portfolio. In doing so, the company has become an aggregator of sorts and a way for investors to play the long-term growth the software space provides.
I think the company’s 21% revenue growth rate this past quarter can continue for some time so long as the market opportunity for continued mergers and acquisitions remains attractive. Personally, I see a long runway of growth ahead. Accordingly, this is one Canadian growth stock investors may want to dive into on their own.
Boyd Group Services
Boyd Group Services (TSX: BYD) is another Canadian growth stock I’ve been bullish on for quite some time. Operating a range of auto body shops across North America, Boyd has seen robust growth over time via consolidating the relatively fragmented auto body repair industry in North America.
Thus, the underlying business models of Boyd and a company like Constellation Software are quite similar in some ways. Apart from being in completely different industries with their own secular growth trends, I think this similarity is one that’s not lost on many long-term growth investors.
Now, Boyd has seen relatively slower growth in recent quarters, with revenue increasing just 2% this past quarter. However, I think that the sector-wide tailwinds that are holding this stock back could abate as long as the average age of the vehicle on the roads continues to increase, resulting in higher demand for auto fixes over time.
