The S&P/TSX Composite Index, the benchmark index for the Canadian stock market, had a great start to the year, climbing by 3.66% by the end of January 2025. As of this writing, the index is down by 4.31% from its 52-week high. The arrival of Donald Trump in the Oval Office and subsequent trade tensions triggered by his flurry of executive orders have been the main reason driving more uncertainty in the economic outlook.
A volatile market environment causes plenty of stocks to suffer, wiping off millions from the stock market as investors take money out and find ways to protect their hard-earned money. It’s important to note that market volatility doesn’t mean every stock suffers from lower share prices. Some stocks tend to perform well despite economic instability.
I have invested in plenty of stocks over the years, but there are few that I can confidently call solid winners in every market environment. One of my favourite picks among them is Dollarama (TSX:DOL). I’ll tell you why it can be a good stock to own, no matter how the trade tensions play out in the coming weeks.
A business for every consumer and a stock for every market
Resilience is a key factor to consider when you are trying to identify a business that you can invest in with full confidence. Dollarama is a shining example of such a stock. The $43.12 billion market capitalization company headquartered in Mount Royal is a dollar store retail chain. The company’s network of discount retail stores provides a wide range of everyday products for consumers at low and fixed prices.
It has stores located throughout the country, providing Canadians the opportunity to buy essential products at a much better price than other places. During harsh economic conditions, people tend to cut costs as much as possible. A retail chain providing discounted products becomes even more valuable for consumers who need to save money.
Solid performance
The unbeatable value it provides keeps customers coming back to its locations to get what they need. This is why Dollarama stock has climbed by almost 640% in the last decade. This has been a market-beating performance because the S&P/TSX Composite Index has shown a 65% growth in the same period. As of this writing, Dollarama stock trades for $155.03 per share.
The October 2024-ending quarter for the company saw its sales climb by 5.7% year over year, and its earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 6.4%. The company’s adjusted net quarterly profit also increased by 5.6%.
The company’s impressive performances are only expected to improve. The management has increased its long-term store target from around 2,000 stores by 2031 to 2,200 by 2034. Considering the brand’s increasing popularity, it makes sense that the company wants to grow its presence further and set itself up for more success.
Foolish takeaway
As a stock market investor, holding a stock that has an excellent long-term track record for growth, the ability to perform well in difficult market environments, and plenty of opportunities to continue growing is as good as it can get. Dollarama has all these qualities that can make it a stock to buy and hold forever.
