Patient Investors: Why These Stocks Could Return Multiples Over a Decade

Two TSX stocks with recurring revenue could quietly multiply wealth over the next decade.

Key Points
  • Recurring revenue from long contracts or subscriptions is the clearest path to durable, multi‑year compounding returns.
  • CP’s single‑line North American network, strong free cash flow, and merger scale position it to grow earnings and buy back shares.
  • Topicus’ vertical‑market software model produces sticky, recurring revenue and steady acquisition‑driven growth for long‑term compounding.

When it comes to finding Canadian stocks that could return multiple returns over a decade, there’s one thing investors should look for: recurring revenue. This can come in multiple forms, but what you want is revenue that’s going to keep flowing no matter the markets. That’s why today, we’re going to look at two top options for investors to consider. One has over 100 years behind it, and the other has just a few. Yet both are safe options on the TSX today.

Man meditating in lotus position outdoor on patio

Source: Getty Images

CP

Canadian Pacific Kansas City (TSX: CP) might just be one of the few Canadian stocks with the potential to quietly multiply in value over the next decade. It’s a world-class transportation company sitting at the heart of North America’s trade network. Now, thanks to its recent merger, it’s positioned better than ever to capitalize on structural shifts in logistics, energy, and supply chains.

What sets CP apart today is its unmatched network. In 2023, the railway completed its historic merger with Kansas City Southern, creating the only single-line rail operator connecting Canada, the United States, and Mexico. The system now spans roughly 32,000 kilometres of track and links key agricultural, manufacturing, and energy hubs across three major economies.

Recent earnings reinforce that strength. In its latest quarterly results, CP reported revenue of $3.7 billion, up from the prior year. Earnings per share were $1.33, comfortably above expectations. Furthermore, financially, CP is in excellent shape. The company has manageable debt levels and strong free cash flow, allowing it to invest heavily in capacity upgrades while still rewarding shareholders through dividends and buybacks. For investors willing to hold through the usual bumps, CP offers the kind of compound growth story that rarely comes around.

TOI

Topicus.com (TSXV: TOI) is one of the few small-cap Canadian tech companies that genuinely has the potential to multiply several times over the next decade. For investors familiar with its parent company, Constellation Software, the long-term playbook is clear: steady, disciplined growth through acquiring and scaling specialized software businesses. Topicus is essentially the next generation of that same proven strategy, just focused squarely on Europe, a massive and still largely fragmented market ripe for

Topicus develops, acquires, and operates vertical market software (VMS) companies. These are highly specialized software businesses that serve specific industries, such as education, healthcare, finance, or municipal services. Their software becomes deeply embedded in their clients’ operations, which makes their revenue recurring, predictable, and sticky. This has shown up in earnings, with revenue rising 20% year over year.

Valuation-wise, Topicus still looks modest compared with its potential. The stock trades at a reasonable 34 times forward earnings, given its growth rate and scalability. Investors are essentially buying into a long runway of small, bolt-on acquisitions that compound earnings steadily year after year. Unlike growth stocks that rely on hype or external funding, Topicus generates the capital it uses to grow, which means it doesn’t depend on cheap debt or investor enthusiasm. That makes it far more resilient if interest rates stay high or if tech sentiment cools.

Bottom line

For long-term investors, both of these Canadian stocks represent a chance for more growth in the next decade. These may not make headlines every quarter, but for patient investors willing to wait a decade, both could very well turn a modest initial investment into a multi-bagger. The kind of steady, exponential story that rewards conviction and time, not timing.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Topicus.com. The Motley Fool recommends Canadian Pacific Kansas City and Constellation Software. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

dividends can compound over time
Dividend Stocks

I’d Rather Own SmartCentres at 98.1% Occupancy Than Chase a Bigger Yield

Before you chase a bigger yield, consider SmartCentres’ 98.1% occupancy, 6.9% yield, and the cash flow supporting its monthly distribution.

Read more »

a person watches a downward arrow crash through the floor
Stocks for Beginners

Market Sell-offs Are Great News for This Boring TSX Stock

A market sell-off can increase demand for TMX’s trading services. Its revenue mix and valuation determine whether shareholders benefit.

Read more »

woman holding steering wheel is nervous about the future
Dividend Stocks

Behind on Retirement in Your 40s? 3 Moves That Can Help

Behind on retirement in your 40s? These three investing moves can help Canadians rebuild momentum through diversification, income, and growth.

Read more »

space ship model takes off
Tech Stocks

Ottawa’s Defence Spending Boom: This Canadian Tech Stock is Already Cashing In

MDA has identifiable government and defence work, but its backlog and profit margins reveal more than the spending headlines.

Read more »

Blocks conceptualizing the Registered Retirement Savings Plan
Dividend Stocks

Your TFSA Pays 15% Tax on U.S. Dividends: Your RRSP Doesn’t

An RRSP can avoid withholding on qualifying U.S. dividends, but holding a Canadian-listed ETF changes the tax treatment.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Rate Hikes Are Back on the Table: This Insurer Wins When Rates Rise

Higher rates could help Sun Life earn more on reinvested assets, but the benefit takes time and brings competing risks.

Read more »

stock chart
Stocks for Beginners

5 Canadian Stocks I’d Buy Right Now

Here are five Canadian stocks that could form a well-rounded, diversified portfolio that you can buy on the October dip.

Read more »

groceries get more expensive as inflation rises
Dividend Stocks

Grocery Inflation Is Back: This Quebec Grocer Keeps Raising Its Dividend

Metro’s dividend keeps growing, but its latest filing shows why higher grocery prices don’t automatically produce stronger earnings.

Read more »