In today’s volatile market, it’s easy to feel like every stock is either overvalued or too risky to touch. But the reality is, you don’t need perfect timing, you need the right Canadian stock. And if you’ve got $500 to invest, one of the smartest places to park that cash right now is Dollarama (TSX:DOL). It’s not flashy, but it’s proven. And in times of uncertainty, that can be exactly what your portfolio needs.
About Dollarama
Dollarama is the king of Canadian discount retail. With over 1,580 stores across the country, it has built a reputation for value. But here’s what really sets it apart: it manages to grow steadily in both good times and bad. While many retailers struggled with supply chain issues, inflation, and changes in consumer habits over the last few years, Dollarama kept pushing forward. It kept costs low, inventory tight, and traffic steady. That’s no small feat in today’s economy.
In its most recent earnings report, revenue for the first quarter came in at $1.41 billion, up from $1.29 billion the year before and ahead of the $1.39 billion analysts had expected. Same-store sales rose 5.6%, which is a strong sign of both loyalty and relevance. Net income hit $215 million, up from $179.9 million. And diluted earnings per share (EPS) came in at $0.76, compared to $0.63 last year. These numbers show that Dollarama isn’t just surviving; it’s thriving.
Growing strong
Part of what makes this growth so impressive is the Canadian stock’s ability to scale efficiently. Operating margins remain around 23%, which is extremely strong for a retailer. And its return on equity sits at a whopping 148.9%. That tells you the business is not only profitable but well-managed.
There’s also the international angle. Dollarama owns a 50.1% stake in Dollarcity, a Latin American discount retailer with stores in Colombia, Guatemala, El Salvador, and Peru. While still smaller in size, Dollarcity is growing fast and offers a long-term growth story outside Canada. In the last quarter alone, it opened 18 new stores, bringing its total to 558. Over time, this international arm could become a major earnings contributor, especially as economies in the region mature.
Safe and stable
One of the biggest advantages Dollarama has is its built-in defence against economic downturns. When times get tough, people tend to cut back on big purchases, but they still need everyday items. That’s when places like Dollarama shine. It offers affordable versions of essential products, and that keeps foot traffic steady even when inflation bites. In a way, it acts like a hedge against recession in your portfolio, which is something many investors are looking for right now.
Even better, Dollarama is still expanding. The Canadian stock plans to reach 2,000 stores by 2031, and it’s well on its way. It has also steadily increased its price-point ceiling to $5 in recent years, allowing for more flexibility in product offerings while maintaining its value image. That gives it room to adapt to inflation and changing consumer demands without losing its core identity.
Bottom line
If you’re looking for a high-risk, high-reward stock that could double overnight, Dollarama isn’t it. But if you want a smart, stable place to invest $500, something that grows quietly, pays a dividend, and keeps showing up in earnings season, it’s hard to find better. It’s the kind of stock that rewards patience, and in this market, patience is a rare and valuable asset.
