Investing in Canadian consumer discretionary stocks known for enduring brand power can help generate significant capital gains over time. Aritzia (TSX:ATZ) and Dollarama (TSX:DOL) are two such Canadian stocks to buy and hold for decades. Their solid fundamentals, established market presence, and consumer appeal position them well to deliver solid growth and outperform the broader market with their returns.
Let’s take a closer look at these Canadian consumer discretionary stocks.
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Consumer discretionary stock #1
Aritzia is one of the top consumer discretionary stocks to add to your portfolio. While recent market jitters tied to the Trump administration’s reciprocal tariffs have weighed on the stock, Aritzia’s long-term fundamentals remain intact.
Since fiscal 2016, Aritzia has grown revenue at a compound annual growth rate (CAGR) of 19%, while earnings have climbed at a CAGR of 13% CAGR. This solid performance has helped the stock surge over 240% in the past five years.
The company’s revenue is supported by an exclusive mix of fashion brands and products, its broad product assortment, and a flexible mix of historical bestsellers and new seasonal styles that keep consumers coming back. Moreover, its investments in digital marketing, supply chain efficiency, and store expansion have laid the groundwork for sustained momentum.
The retailer plans to expand aggressively in the U.S., targeting eight to 10 new boutique openings annually through 2027. The move is expected to increase retail square footage by 60% and boost brand visibility in high-growth markets. At the same time, Aritzia is strengthening its omnichannel capabilities, which will drive its top line and overall financials.
Aritzia is poised to deliver solid growth, with management projecting its top line to increase at a CAGR of 15-17% through 2027. Its higher revenue and focus on operational efficiency position it well to deliver solid earnings growth, which will support Aritzia stock in the long term.
Consumer discretionary stock #2
Dollarama is another top consumer stock to buy and hold. The stock offers an attractive blend of growth potential, dependable dividend income, and stability to your portfolio. The company’s strategy revolves around providing a wide array of consumer goods at consistently low prices, appealing to customers across economic cycles.
Dollarama’s value pricing strategy has proven effective in driving its same-store sales and customer base, supporting its share price. Further, its defensive business model makes it relatively immune to significant market swings.
Thanks to its consistent growth, Dollarama stock has jumped about 32% over the past year, outperforming the broader market. Looking back over five years, its share price has skyrocketed by 282%, growing at a CAGR of 30.7%. Moreover, Dollarama has consistently enhanced its shareholder value by regularly increasing dividend payouts, having raised dividends 14 times since 2011.
Dollarama stock is poised to sustain its upward trajectory. Its competitive pricing strategy and expanding network of stores are anticipated to drive higher customer traffic and revenue, even amid the recession. Moreover, operational efficiencies and strategic initiatives in sourcing and productivity are expected to bolster margins and profitability, supporting continued dividend growth and delivering strong returns for shareholders.
