Among the markets investors go to in search of the top growth stocks to buy, the TSX isn’t necessarily the first choice for many. That’s sad, in my view, as there happen to be a number of great options in this market worth considering.
While I’ve often focused my attention on some of the largest growth stocks Canada has to offer, there are other mid-cap growth champions I think are worth considering. In this piece, I’m going to highlight two such companies I think provide great long-term capital appreciation upside potential, and why they may be poised to take off once the global veil of uncertainty is lifted.
So, without further ado, let’s dive in!
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Kinaxis
Kinaxis (TSX: KXS) is a top Canadian growth stock in the supply chain management software space, providing a range of Software as a Service (SaaS) solutions, such as the company’s flagship RapidResponse platform. This portfolio of products and services is behind the company’s robust long-term growth.
The company’s position as a leading SaaS company with a focus on providing efficiency-generating solutions for its clientele who are increasingly in need of agility and resiliency-based platforms really does position the company well for long-term growth. And while the company’s stock chart has been volatile of late, I think this is a stock that’s worth keeping on the watch list and adding to during times of uncertainty.
The company has seen strong growth in its SaaS subscription revenue in recent quarters, actually seeing an acceleration in the fourth quarter (Q4) to 17% growth on this front. I think the company’s ability to attract new customers thanks to Kinaxis’s investments in artificial intelligence (AI) and partnerships with a range of industry leaders on this front should provide greater growth upside than currently exists.
For these reasons and others, Kinaxis is a top Canadian growth champion that I think investors would be remiss to ignore right now.
OpenText
Another top Canadian tech company I think is worthy of growth investors’ attention right now is OpenText (TSX: OTEX). This company’s focus on providing enterprise information management software to a global clientele is noteworthy and one of the key reasons why I think this stock is worth considering.
OpenText has become one of the few growth-oriented tech companies in Canada that now provides what I’d call a value or dividend tilt. With a current dividend yield of nearly 4% and a valuation multiple of right around 11 times trailing earnings, I’d actually go so far as to qualify OpenText as a value stock in this environment.
That’s remarkable, given the company’s strategic focus and investments it’s making in the world of AI, cloud and security. These investments should continue to boost the company’s cash flow and earnings profile over time. In my view, these fundamental factors should force the company’s stock price higher (that’s how it’s supposed to work). But we’ll see — this market hasn’t made sense for some time.
If analysts are right, and OpenText is able to roughly double its cash flow over the next three years, this is a no-brainer Canadian growth champion to own right now.
