Despite being a relatively small economy (at least compared to the U.S.), Canada has produced some exceptional businesses. Luckily for Canadians, there is no shortage of Canadian stocks that have delivered strong compounded returns over both the short and long term.
Stocks that have a great record of performance tend to have a secret sauce (or competitive advantage) that can be replicated in the future.
As a result, past winners often tend to be winners for the future. If you are looking for Canadian stocks that have won and will continue to win, here are three I like for long-term growth.
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A Canadian real estate services stock with global growth
Colliers International Group (TSX: CIGI) has delivered mid-teens total returns for shareholders over the past three decades.
Colliers has a well-established real estate brokerage and services brand around the globe. This business can be economically cyclical. With high interest rates, results have temporarily been impacted by tepid transaction demand.
The good news is that this won’t last forever. The brokerage business will recover. The even better news is that Colliers has diversified its business in the past five years. Today, it offers property management, financing/debt services, project management, engineering, and asset management.
In fact, over 70% of its income comes from recurring income businesses. Colliers is working to build up substantial engineering and asset management platforms.
At some point, these could be spinout candidates. That could unlock a lot of value in the stock.
This Canadian stock has recently pulled back. That could present a great buying opportunity if you see this as a decade (or more) long holding.
A Canadian software stock essential to the world supply chain
Descartes Systems (TSX: DSG) is another Canadian growth stock for the long run. Descartes operates the largest logistics network in the world. It is a crucial organ in the global supply chain.
Over the years, Descartes has acquired many logistics and transport-related software vendors. It has a significant business involved in trade compliance and regulations. Given all the changing tariffs and trade regulations, demand for Descartes services will only rise. It tends to perform better when there is lots of trade uncertainty.
There is a lot to like about this company. It has an accomplished management team, a cash-rich balance sheet ($180 million), high recurring revenues, and an elevated profit margin profile (over 20%). The one negative is that this Canadian stock is always expensive.
The best way to play this Canadian stock is to buy it on dips and average in. If it can continue its 12-15% annual growth trajectory (it is likely to do better), long-term shareholders are likely to be well-rewarded.
A technical advisory stock with massive long-term tailwinds
WSP Global (TSX: WSP) is another long-term stock for Canadians to hold. With a market cap of $33 billion, WSP has become one of the largest engineering, design, project management, and advisory firms in the world. It has done this by acquiring nearly 200 firms into its fold over the past few decades.
Diversified by geography and service mix, it can provide end-to-end solutions for those planning and building large-scale projects. Certainly, with factors like urbanization, climate change, population growth, and aging infrastructure, there is no shortage of projects ahead.
WSP just announced a new three-year plan. It continues to be optimistic about the future. It is projecting strong margin expansion and low to mid-teens annual earnings growth over that period. For a Canadian stock with strong secular tailwinds of growth, WSP is a great stock to buy now and hold for years.
