Long-term investing is a strategy whereby investors buy and hold assets for a period of over three years. This strategy shields investors from short-term volatility while providing superior returns through the power of compounding. It also reduces transaction expenses and requires less time to monitor equity markets. Against this backdrop, let’s look at three top Canadian stocks you should consider buying with a longer investment horizon to earn superior returns.
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Dollarama
Dollarama (TSX:DOL), a discount retailer, would be an excellent long-term investment due to its consistent financial performance and healthy growth prospects. The company has adopted a superior direct-sourcing model, eliminating intermediary expenses and strengthening its bargaining power. Additionally, the retailer’s efficient logistics system has enabled it to offer a wide array of products to its customers at attractive prices, resulting in healthy same-store sales even during a challenging macroeconomic environment.
Driven by these solid same-store sales and an expanding store network, the company’s top and bottom lines have grown at an annualized rate of 11.4% and 17.9%, respectively, over the last 14 years. Anchored by these healthy financials, the company has delivered returns of approximately 4,490% over the past 15 years, at an annualized rate of 31.4%.
Moreover, Dollarama continues to expand its business through organic growth and strategic acquisitions. The company anticipates adding 584 stores over the next nine years, expanding its store network to 2,200 by the end of 2034. Additionally, the company holds a 60.1% stake in Dollarcity, which operates 632 stores across Latin America. Dollarcity also has plans to expand its store network to 1,050 by the end of 2032. Dollarama can also increase its stake in Dollarcity by exercising its option within the next two years. Moreover, Dollarama is working on entering the Australian retail market through the acquisition of the Reject Shop, which operates 390 stores, for $233 million. Considering its healthy growth prospects, I expect the uptrend in Dollarama’s financials to continue, supporting its stock price growth.
Celestica
Second on my list is Celestica (TSX:CLS), which has delivered impressive returns of 1,070% over the last three years at an annualized rate of 127.3%. The supply chain solutions provider’s solid financial performance and exposure to the high-growth artificial intelligence (AI) sector have supported its stock price growth. Moreover, the increased adoption of AI has led to increased investments in building AI infrastructure, thus driving the demand for the company’s products and services.
Moreover, Celestica continues to develop innovative products that could meet the growing needs of its customers, thereby supporting its financial growth. For 2025, the company’s management projects its revenue and adjusted EPS (earnings per share) to grow by 12.4% and 28.9%, respectively, which looks healthy. Additionally, its valuation appears attractive, with the company trading at 1.2 times analysts’ projected sales for the next four quarters.
Savaria
Savaria (TSX:SIS) provides accessibility solutions to individuals with physical challenges worldwide through its manufacturing facilities and robust distribution network. The demand for accessibility products and solutions could increase amid the aging population and rising income levels, thereby expanding the market for the company’s products and solutions.
Amid rising demand, Savaria focuses on developing innovative products and strengthening its production capabilities. The Laval-based accessibility solutions provider acquired Western Elevator earlier this month, strengthening its position in the luxury residential elevator market. It is also working on improving its operational efficiencies and streamlining its procurements, which could drive profitability. The company pays monthly dividends, with a yield of 2.8% as of the June 3 closing price. Considering its solid underlying business and expanding addressable market, I am bullish on Savaria.
