Finding stocks that can consistently outperform the market isn’t easy, especially in a volatile environment. However, some companies have built proven track records of compounding wealth and are now trading at attractive valuations. Here are three Canadian stocks that could be top performers over the next five years — ideal for investors looking to buy and hold solid businesses through 2030.
1. Constellation Software: A rare opportunity in a proven compounder
Constellation Software (TSX:CSU) is down but far from defeated. The tech conglomerate’s shares have slipped roughly 38% from their 52-week high, but its long-term record remains stellar.
Over the past five and 10 years, Constellation has generated annualized returns of about 20.3% and 21.6%, respectively — comfortably outperforming the broader Canadian market’s 16.3% and 12.3%.
At about $3,230 per share, CSU currently trades at a blended price-to-earnings (P/E) ratio of 23.6 — its cheapest valuation since 2019. For a serial acquirer with decades of disciplined capital allocation and recurring cash flow, this is a rare chance to accumulate shares in a top-tier compounder.
Analysts see a near-term upside of around 58%, suggesting the market may be underestimating its growth runway. If Constellation continues growing its earnings and free cash flow at double-digit rates, as it has for years, investors could see annualized returns north of 15% over the next five years.
2. goeasy: A dividend powerhouse trading at a discount
Non-prime lender goeasy (TSX:GSY) has faced turbulence, with its stock down roughly 42% from its 52-week high. Yet long-term investors have been well rewarded — the company’s 10-year annualized return of 23.8% has nearly doubled the broader market’s pace.
At about $125 per share, goeasy trades at a deeply discounted P/E of 7.6, suggesting meaningful room for multiple expansion. If the stock reverts to its historical valuation levels, it’d indicate a fair value of around $189, representing 51% upside. Meanwhile, shareholders collect a 4.6% dividend yield — and that payout has grown for 10 straight years at an eye-popping 30% compound annual growth rate (CAGR).
Weak consumer sentiment has pressured the shares, but that’s also what makes this a compelling long-term entry point. As the economy stabilizes, goeasy’s consistent double-digit earnings growth and a potential valuation recovery could drive 15–25% annual total returns through 2030.
3. Gildan: A cyclical story with merger momentum
Unlike the first two, Gildan Activewear (TSX:GIL) hasn’t beaten the market over the last decade — but the next five years may tell a different story.
The apparel maker’s merger with Hanesbrands, announced in August, has already earned positive analyst re-ratings. Upon closing (expected later this year or early 2026), management anticipates +20% accretion to earnings per share (EPS) and US$200 million in annual cost synergies that could lead to its adjusted EPS rising in the low 20% range at a CAGR over the next three years.
Trading at about $81 per share, Gildan’s analyst consensus target implies 24% near-term upside. As a consumer cyclical, it’s not without risks, but patient investors could start with a partial position and add on dips as the merger unfolds.
Investor takeaway
No stock wins every year, but this basket — featuring Constellation’s steady growth, goeasy’s income power, and Gildan’s merger potential — offers a balanced blend of value, momentum, and compounding. For investors seeking long-term performance, these three names could shine over the next five years.
