With so much going on in the economy and politically right now, both north and south of the border, it’s a lot for retail investors to keep track of. That said, though, when you focus on finding the highest-quality stocks on the market to buy, stocks that you can have confidence owning for years, you can ignore a lot of the noise.
Don’t get me wrong, it’s still important to understand what’s going on and how it may impact your portfolio. However, the best stocks will continue to grow and expand their operations over the long haul regardless of what happens in the near term.
That’s why my two favourite stocks to buy right now are some of the highest-quality businesses you can own. These are companies that have an impressive track record of outperforming both their peers and the broader economy for years through many different market and economic environments.
So, with that in mind, if you’ve got hard-earned cash you’re looking to put to work today, here are my two top stocks to buy right now.
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One of the best defensive growth stocks to buy and hold for decades
Typically, the larger a company gets, the harder it becomes to continue growing at an exceptional pace. Yet even though Dollarama (TSX:DOL) has earned investors a total return of 600% over the last decade and now has a market cap of more than $37 billion, it’s showing no signs of slowing down.
First, its core business in Canada still has a lengthy runway for growth. Dollarama continues to aim to open 60-70 stores each year, growing from just over 1,600 stores today to a goal of roughly 2,200 by 2034.
And why wouldn’t it continue to open stores at such a rapid pace? According to the company, it earns back the cash flow it takes to open a new store within two years of opening its doors, showing exactly why its share price continues to climb at such an incredible pace.
Plus, in addition to the organic growth it sees from new store openings, Dollarama also consistently sees a boost to same-store sales in its existing locations as consumers are always looking to stretch their budgets and save as much as possible on essential staples and household goods.
Furthermore, besides its core business in Canada, another reason it’s one of my favourite stocks to buy now is its growth potential in Latin America with one of its newest investments in Dollarcity.
Currently, Dollarcity has just shy of 600 stores across four countries in Latin America and is targeting a total of more than 1,000 by 2031, which includes expansion into Mexico.
It’s worth noting that the stock is certainly expensive, trading at a forward price-to-earnings (P/E) ratio of 30.6 times; however, it’s proven time and again that it deserves a growth premium. For example, the cheapest it’s traded in the last three years was at a forward P/E ratio of 24.5 times.
So, although 30.6 times forward earnings may seem high, it’s actually only slightly above its average P/E ratio of 28.3 times during that stretch. It’s also considerably lower than its high of 35.3 times forward earnings that it reached in the past three years.
Therefore, while Dollarama trades off its highs and continues to have so much growth potential both in the short and long term, it’s easily one of my favourite stocks to buy right now.
A top telecom stock trading dirt cheap
In addition to Dollarama, another defensive growth stock to buy right now is Telus (TSX:T). A telecom stock like Telus is an ideal long-term investment for several reasons.
It, too, has significant growth potential over the long haul, yet it’s also a reliable stock in the near term, even if the economy were to worsen.
Telus provides essential services and constantly generates a tonne of cash flow, allowing it to fund its significant dividend and have capital left to invest in future growth.
Furthermore, with the stock currently trading near the bottom of its 52-week range, its dividend, which it constantly increases every year, now has an incredible yield that’s just shy of 8%.
Therefore, while this reliable income generator trades dirt cheap, it’s certainly one of my favourite stocks to buy right now.
