Investing in mid-cap Canadian stocks can be a smart way to balance risk and reward over the long term. These companies are established enough to provide some stability yet still have plenty of room for growth. For investors looking to hold onto stocks for the next decade, it’s crucial to find companies with strong fundamentals, consistent revenue growth, and a clear strategy for the future. While large-cap stocks dominate headlines, mid-cap stocks often provide better upside potential without the volatility of smaller, unproven companies.
Source: Getty Images
Boyd
Boyd Group Services (TSX: BYD) has made a name for itself in the auto repair industry, expanding across North America through strategic acquisitions and steady operational improvements. In its latest earnings report for the third quarter of 2024, Boyd reported a 2.0% increase in revenue to $752.3 million compared to the same period in 2023.
However, net earnings took a hit, dropping to $2.9 million from $20.5 million a year prior, bringing earnings per share (EPS) down to $0.13 from $0.95. Despite the dip in profitability, Boyd remains a long-term play as its scale and efficiency improvements should drive stronger margins over time.
goeasy
goeasy (TSX: GSY) is a leader in the alternative lending space, providing credit to Canadians who may not qualify for traditional bank loans. Over the past decade, goeasy has demonstrated resilience and strong profitability. Growing its loan portfolio while maintaining healthy margins.
The Canadian stock’s ability to navigate changing economic conditions and regulatory environments makes it a compelling stock to hold long-term. With a forward price-to-earnings (P/E) ratio of just 8.38, goeasy remains attractively valued for those looking to invest in financial services outside the big banks.
Equinox
Equinox Gold (TSX: EQX) is a mid-tier gold producer with strong production growth and expansion potential. Gold remains a critical hedge against economic uncertainty, and Equinox positioned itself well with multiple mines in operation and new projects in development.
In its most recent quarter, revenue surged by 50.4% year over year, showing the Canadian stock’s ability to capitalize on rising gold prices and increased production. While gold miners often experience volatility, Equinox’s focus on cost efficiency and expansion gives it a solid foundation for the next decade.
Northland Power
Northland Power (TSX: NPI) has established itself as a key player in renewable energy—particularly offshore wind and solar projects. While the Canadian stock reported a net loss of $148.17 million in its most recent quarter, its long-term investment in renewable energy infrastructure is what makes it a compelling hold.
Northland has a history of strong cash flow generation. And with governments worldwide pushing for more clean energy initiatives, it’s well-positioned to benefit from this transition. The Canadian stock’s dividend yield also makes it an attractive pick for income investors looking for sustainable returns.
Cargojet
Cargojet (TSX: CJT) is Canada’s dominant overnight air cargo provider, benefitting from the continued growth of e-commerce and logistics demand. In its latest quarter, revenue climbed by 14.8% year over year, demonstrating its ability to capture market share in a highly competitive space.
While its earnings have been inconsistent due to fluctuating operating costs, Cargojet’s long-term contracts with major retailers and shipping companies provide a level of stability that many logistics companies lack. As online shopping remains a permanent fixture of consumer behaviour, Cargojet should continue to see demand for its services grow.
Bottom line
These five companies represent a diverse mix of industries, from auto repair and financial services to gold mining, renewable energy, and logistics. Each Canadian stock has its own set of challenges. Yet these Canadian stocks also have the potential to generate significant returns for investors who are willing to hold on for the long term. While short-term fluctuations in earnings and stock prices are inevitable, the fundamentals of these businesses remain strong.
As always, diversification is key. While these five stocks offer great potential, they should be part of a well-rounded portfolio that includes a mix of asset classes and sectors. Investors should also consider their risk tolerance and investment goals when deciding how much to allocate to mid-cap stocks. With the right approach, these Canadian stocks could be valuable long-term holdings in any Canadian investment portfolio.
