There are plenty of high-quality Canadian stocks with impressive growth potential, but there’s a significant difference between the very best growth stocks you can buy and those that fall into the second tier.
Top growth stocks possess several key qualities, such as consistently outperforming their peers, the ability to expand operations across various market conditions, and a consistent streak of delivering robust returns to investors year after year.
While it’s true that past performance doesn’t guarantee future returns, companies with long track records of above-average growth often have the qualities needed to sustain their success for years to come.
It’s important to note that these businesses typically trade at a premium, as the market recognizes their quality. However, these growth premiums actually reflect their true value rather than indicate overvaluation.
So, with that in mind, let’s explore two of the best Canadian growth stocks you can buy now for less than $500.
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A top defensive growth stock to buy now and hold for years
Over the past decade, one of the best growth stocks in Canada has been Alimentation Couche-Tard (TSX:ATD), earning investors a total return of roughly 250% over that stretch.
Couche-Tard is one of the largest convenience store and gas station operators in the world, and its ability to consistently deliver growth makes it one of the best stocks to buy and hold today.
The company operates a highly resilient business model, focusing on everyday essentials like snacks, drinks, and fuel. These are products that consumers rely on, regardless of economic conditions, ensuring stable and reliable revenue streams.
What sets Couche-Tard apart, though, is its impressive growth strategy. The company has mastered the art of acquisitions, expanding rapidly by purchasing and integrating smaller competitors over the years to rapidly expand its operations.
These strategic moves not only grow its footprint but also improve profitability by scaling costs and finding operational efficiencies. Plus, beyond its traditional business, Couche-Tard is also preparing for the future.
For example, Couche-Tard is investing in initiatives like electric vehicle (EV) charging stations and enhanced loyalty programs, ensuring it stays relevant as consumer habits continue to evolve.
Furthermore, its global presence with operations across North America, Europe, and other international markets further diversifies its operations helping to mitigate risk and providing ample opportunities for long-term growth.
In fact, over the last five years, Couche-Tard’s normalized net income has increased at a compound annual growth rate (CAGR) of 7.7%, while its earnings before interest, taxes, depreciation and amortization (EBITDA) have increased at a CAGR of 9.8%.
So if you’re looking for one of the best growth stocks to buy now, not only do analysts anticipate Couche-Tard’s strong growth to continue in the coming years, but the stock is also currently trading just off the bottom of its 52-week range.
One of the best large-cap stocks in Canada
In addition to Couche-Tard, another no-brainer growth stock to buy right now is Thomson Reuters (TSX:TRI), despite its market cap of $100 billion.
Thomson Reuters is a global leader in providing data, software, and insights to professionals across critical industries like legal, tax, and finance.
Its business model is built on highly reliable subscription-based services that generate predictable revenue, making it a defensive yet growth-oriented investment. Therefore, even though the company has grown significantly for years, up over 500% in the last decade, it continues to have a tonne of growth potential.
Over the years, Thomson Reuters has consistently grown its earnings by leveraging its reputation as an essential partner to businesses worldwide.
Furthermore, in addition to the resilient cash flow it generates, the information services provider continues to make significant investments in artificial intelligence and data analytics, helping it stay modern and valuable to its customers while driving its future growth potential.
In addition, Thomson Reuters continues to expand its presence in emerging markets, which helps to diversify its revenue streams and create more opportunities for long-term growth.
In fact, over the next two years, analysts expect its normalized earnings per share to increase at a CAGR of more than 10%.
So, if you’re looking for top growth stocks to buy now and hold for years to come, Thomson Reuters is easily one of the best investments Canadians can buy today.
