Investing in equity markets is an excellent means to build wealth over the long term. You don’t require huge capital to start your investment journey. Making small but regular investments in quality stocks can create substantial wealth over the long term. Let’s look at three stocks with healthy long-term growth potential that you can buy with just $50.
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Savaria
Savaria (TSX: SIS) is one of my top picks due to its solid financial performance and healthy growth prospects. The accessibility solutions provider posted a healthy first-quarter performance last month, with its top line growing by 5.2% amid favourable currency translation and organic growth. Its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) rose 17.2% to $40.6 million, while its adjusted EBITDA margin expanded from 190 basis points to 18.5%.
The company also strengthened its financial position, with its net debt-to-adjusted EBITDA improving from 1.63 to 1.49. It also ended the quarter with $254.7 million of available funds, therefore well-equipped to fund its capital investments and growth opportunities.
Moreover, the aging population and rising income levels continue to drive the demand for accessibility solutions. Given its innovative product launches, widespread manufacturing facilities, and solid dealer network, Savaria is well-positioned to benefit from the expanding addressable market. Additionally, the adoption of its “Savaria One” initiative has led to structural improvements, strengthening of its production capacity, and enhanced operational efficiencies. Notably, the company also pays monthly dividends, with its forward yield at 2.83%. Considering all these factors, I expect Savaria to deliver superior returns over the next five years.
Docebo
Another under-$50 Canadian stock that I am bullish on is Docebo (TSX: DCBO), which offers scalable and personalized learning programs through its end-to-end learning platform. The company had posted an impressive first-quarter performance last month, beating its revenue and profitability guidance. Its top line grew 11.5% to $57.3 million amid strong performance from its subscription segment.
The company posted a net income of $1.5 million during the quarter. However, removing one-time or extraordinary expenses, its adjusted net income stood at $8.5 million, translating into an adjusted EPS (earnings per share) of $0.28. Its adjusted EPS represents a 16.7% increase from the previous year’s quarter. It also generated $9 million of free cash flow during the quarter, accounting for 15.6% of the company’s total revenue.
The LMS (Learning Management System) market is expanding amid rising remote working, technological developments, and its cost-effectiveness and scalability. Meanwhile, Docebo is focusing on innovation and has launched several artificial intelligence-powered products, which could strengthen its position. Additionally, its expanding customer base and growing average contract value are likely to support its financial growth in the years to come. Meanwhile, amid the recent weakness, the company has lost over 40% of its stock value this year, with its NTM (next 12 months) price-to-earnings multiple falling to 22.9, making it an excellent buy.
WELL Health Technologies
My final pick is WELL Health Technologies (TSX: WELL), a tech-enabled healthcare company that facilitates healthcare professionals to deliver positive patient outcomes. The digitization of clinical procedures and the increased adoption of telehealthcare services have created a multi-year growth potential. Amid the expanding addressable market, the company continues to launch innovative products to grow its market share. It has recently partnered with WovenX Health to deliver integrated, next-generation gastroenterology practice solutions.
Along with these growth initiatives, WELL Health is also focusing on inorganic growth and has signed 11 letters of intent. These acquisitions can contribute $65 million to its annualized revenue. Additionally, the company initiated a share-repurchase plan last month, with plans to repurchase 6.33 million shares over the next 12 months, thereby reducing its outstanding shares by 2.5%. Considering all these factors, I believe WELL Health would be an excellent long-term buy.
