When looking for the best Canadian stock to own this decade, the answer may not be a flashy newcomer or a trendy pick. It may just be one of the quietest, most consistent performers on the TSX. Constellation Software (TSX:CSU) isn’t a household name for most Canadians, but it has built one of the strongest track records in Canadian market history. For long-term investors, this could be the stock to hold for the next 10 years and beyond.
Why Constellation
Constellation Software is a Toronto-based company that acquires and operates vertical market software businesses. That means it buys companies that serve specific industries, like software for libraries, police departments, or insurance brokers. These aren’t high-growth social media apps or cloud platforms with huge hype. Instead, they’re niche businesses that provide mission-critical services and generate reliable recurring revenue. And that’s the secret to Constellation’s success.
The Canadian stock is now valued at around $104 billion and has grown consistently since going public in 2006. It operates through six major business units across North America, Europe, and Australia. Each division runs semi-independently, allowing local managers to focus on their customers while benefiting from the strength of the overall company. That decentralized model has allowed Constellation to scale without losing its grip on performance.
Into earnings
In its most recent earnings report for the first quarter of 2025, Constellation reported revenue of US$2.7 billion, up 13% from the same period last year. Net income came in at US$115 million, up nearly 10%. Over the last 12 months, the company has generated $14.9 billion in revenue and $1.1 billion in net income. Those numbers are impressive for any company, let alone one that rarely makes headlines.
The software firm is also incredibly efficient. Its return on equity is 26%, and its return on assets is 7.5%. Constellation is a cash machine, bringing in over $3.1 billion in free cash flow over the last year. It uses that cash to make more acquisitions, often small ones that fly under the radar but add meaningful long-term value. Unlike some Canadian stocks that make one big splashy deal, Constellation has made hundreds of small ones over the years. That strategy has worked exceptionally well.
More to come
Yes, the Canadian stock trades at a high valuation. CSU’s trailing price-to-earnings (P/E) ratio is around 97, and its forward P/E sits near 41. But this has never been a cheap stock, and it likely never will be. That’s because investors are willing to pay up for the consistency, profitability, and long-term strategy. The Canadian stock has very little customer churn, very little debt pressure, and a clear path for continued growth. And in a world where many tech companies are still chasing profits, Constellation has delivered year after year.
Analyst sentiment remains strong. Most experts have a buy or hold rating on the stock, with an average target price above $5,200. That’s modest upside from current levels, but the real appeal here is the compound growth over time. It’s not going to double overnight, but that’s not the point. This is a long-term compounder, not a short-term trade.
Bottom line
As Canadians tighten budgets due to rising mortgage costs and market uncertainty, it’s more important than ever to focus on high-quality, dependable investments. In that kind of environment, owning a steady compounder like Constellation makes a lot of sense.
Constellation Software may not get the same buzz as other tech names, but its results speak for themselves. It grows steadily, manages capital wisely, and serves industries that don’t disappear in downturns. For anyone looking to invest in a Canadian stock that could define their portfolio over the next decade, CSU might be the one to watch. It’s quietly magnificent, and exactly the kind of Canadian stock built to last.
