Finding stocks you can buy, hold, and potentially watch compound your wealth over a decade is the holy grail of investing. Two under-the-radar Canadian companies, Stella-Jones (TSX: SJ) and Propel Holdings (TSX: PRL), seem to possess a rare combination of strong fundamentals, powerful tailwinds, a strong commitment to shareholder returns, and the disciplined management needed for exceptional long-term returns. Let’s see how they could make long-term oriented investors richer over the next decade.
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Stella-Jones: An undervalued lumber play powering up North America’s grid
Stella-Jones isn’t a flashy tech stock; it’s the essential backbone of North America’s electrical and railway infrastructure. The company treats and supplies critical wooden utility poles and railway ties. While recent quarterly results showed some near-term softness (organic sales down 4% year-over-year during the second quarter, largely tied to cautious utility spending in Canada and a Class 1 railway customer shifting some volume in-house), the long-term story is electrifying – literally.
The catalyst for Stella Jones’ stock’s superior returns? A massive, unavoidable upgrade cycle for North America’s aging electrical grid, supercharged by soaring electricity demand from artificial intelligence (AI) data centres and electrification trends. The company confirmed, in an August earnings call, a significant pickup in quoting activity, particularly in the vital U.S. Southern Yellow Pine region, and expects utility pole volumes to steadily improve through the second half of 2025 and into 2026.
Further, Stella Jones’ recent strategic acquisition of Loeweld catapults it into the $5 billion annual steel transmission structure market, providing a new growth runway. Crucially, the company has already secured a significant five-year commitment from a major utility to utilize this new capacity.
Financially, Stella-Jones shines. The company maintains impressive profitability and continues to generate positive free cash flow despite recent lower volumes. Sustained free cash flow generation enables management to enhance shareholder returns through stock repurchases and double-digit annual dividend growth rates.
With an earnings payout ratio comfortably below 20%, Stella Jones’s annual dividend hikes should be sustainable over the next decade, raising the 0.6% yield beyond 3% annually.
Trading at a price-to-free cash flow ratio of just 12 (vs. an industry average near 49) and a price-to-tangible book value of 2.2 (vs. an industry average of 8.9), the stock looks fundamentally cheap for a company positioned to ride a decade-long infrastructure wave.
Propel Holdings: Financing the underserved while generating outsized returns
Propel Holdings operates in the vital but often overlooked alternative credit space, providing loans to consumers underserved by traditional banks. Its story, amplified by insights from the recent Canaccord Genuity 45th Annual Growth Conference, is one of exceptional growth fueled by a unique market opportunity and cutting-edge technology.
Here’s Propel Holdings’s powerful setup: Major banks are drastically tightening lending standards. Rejection rates for applicants soared during the past quarter, creating a flood of marginally creditworthy borrowers turning to companies like Propel. The company is enjoying surging demand combined with stellar credit performance thanks to its best-in-class, AI-powered underwriting engine, which analyses more than 80,000 applications daily.
The fintech stock’s growth is staggering. Revenue has soared from roughly $100 million pre-2021 to a projected $620 million midpoint for 2025, and it’s mostly organic. Profitability is even stronger, as marginally fixed costs give way to expanding operating margins, showcasing incredible operating leverage. The company’s recent acquisition of Quid Market in the UK is exceeding expectations and may propel further revenue and earnings growth in 2026 and beyond.
Crucially for long-term investors, Propel Holdings is committed to sharing its success. The company has delivered nine consecutive dividend increases since 2023, and targets paying out up to 50% of adjusted earnings as dividends (currently under 29%), offering massive dividend growth potential alongside soaring profits. The current dividend yields 2.4% annually.
With a return on equity (ROE) consistently exceeding 20%, Propel Holdings stock could generate significant returns to shareholders over the next decade. Shares have almost quadrupled in value over the past five years.
Investor takeaway
While short-term market fluctuations are inevitable, the foundational strengths and powerful tailwinds behind Stella-Jones and Propel Holdings position them exceptionally well to potentially deliver market-crushing returns for patient investors over the next 10 years. They are building wealth systematically, one pole, one loan, and one dividend increase at a time.
