When it comes to building wealth in the stock market, there’s no question that some of the most important stocks you buy are high-quality Canadian growth stocks.
The key is understanding what makes a high-quality growth stock. Many new investors, for example, make the mistake of thinking that means looking for the hottest or most volatile stocks.
However, those companies can be incredibly risky and often aren’t even growing their sales or operations that well just yet; most of the volume is coming from speculation.
Instead, you want to focus on companies that consistently expand their sales, earnings, and market share, allowing their stock prices to climb steadily over time.
In fact, some of the best growth stocks don’t seem that exciting at all. However, their consistent execution and high-quality operations allow them to continuously outperform the market over the long run and reward investors considerably.
Furthermore, when you buy a high-quality growth stock while it’s trading undervalued, not only do you gain exposure to years of growth potential, but those gains are amplified by the fact that you bought undervalued, boosting your returns even more.
So, if you’ve got cash that you’re looking to put to work, here are three of the best Canadian growth stocks to buy right now.
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One of the best defensive growth stocks to buy now
Although many investors often think of highly volatile industries such as tech when looking for growth stocks to buy, even businesses that operate in traditionally defensive industries can offer attractive and consistent growth over the long haul.
For example, one of the best Canadian growth stocks to buy now is Brookfield Infrastructure Partners (TSX: BIP.UN).
Brookfield is predominantly a defensive investment. The company owns and operates critical infrastructure assets around the world, such as utilities, transportation networks, data centres and much more.
That’s important because these assets generate stable, inflation-linked cash flows, which is why Brookfield is so reliable and defensive. In addition, though, Brookfield is also consistently looking to expand and grow its portfolio.
So while it uses its earnings to fund the dividend, which has a current yield upwards of 5.5%, it also constantly reinvests funds into new projects, which is what gives it so much long-term growth potential.
Therefore, while Brookfield trades nearly 20% off its 52-week high, and considering its average analyst target price of $56.76 is a more than 33% premium to today’s trading price, there’s no question it’s one of the best growth stocks to buy now.
2 ultra-cheap growth stocks
In addition to Brookfield, two more of the best Canadian growth stocks to buy now are Cargojet (TSX: CJT) and Granite REIT (TSX: GRT.UN).
Cargojet has a tonne of long-term growth potential as the dominant player in the overnight air cargo market in Canada, handling time-sensitive deliveries for customers like Amazon and Canada Post.
Considering its impressive market share and long-term contracts providing a reliable base of revenue, plus the ongoing growth in the popularity of online shopping, Cargojet is a stock that has considerable long-term growth potential.
Furthermore, while volumes can fluctuate, especially in different economic conditions, Cargojet has proven it can manage costs efficiently while expanding its operations and growing its fleet, showing why it’s one of the best Canadian growth stocks to buy and hold long term.
In fact, Cargojet has eight analysts covering the stock, with seven giving it a buy rating and one analyst giving Cargojet a hold rating. In addition, the average analyst target price of $143.25 is a more than 43% premium to where it’s trading today.
Meanwhile, Granite REIT is an impressive industrial REIT that has also benefited from the growth in e-commerce and the significant increase in demand for warehouse and industrial space as a result.
Plus, because Granite owns logistics and warehouse properties that are leased to investment-grade tenants on long-term contracts, its operations generate stable cash flow, which is why it’s not just one of the best Canadian growth stocks to buy now, it’s also a solid dividend stock offering investors a current yield of more than 4.4%.
