There is no doubt that investing in high-quality growth stocks can be an excellent way to grow your wealth in the long run. These are the kind of companies that can expand earnings, grow revenue, and provide greater value to shareholders year after year, often beating the rest of the market while at it.
While growth stocks provide returns that can outpace the broader market, they rarely look cheap. High-quality businesses with solid advantages in their industries trade at a premium for good reason. A well-established blue-chip stock will attract more interest from investors who want to make reliable and safer investments to protect their investment capital.
In many cases, high-quality stocks can become overbought. However, periods of market volatility can lead to broad sell-offs. During periods of market weakness, investors can also offload shares of healthy stocks amid the panic. This can create a chance for opportunistic investors looking for a bargain on the stock market.
Today, I will discuss two growth stocks trading at significant discounts from all-time highs that you can buy today.
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Dollarama
Dollarama Inc. (TSX: DOL) is a $52.6 billion market-cap TSX company that owns and operates discount retail stores across Canada. The company provides a wide range of daily-use items at low, fixed price points, providing consumers the chance to cut costs on their essential shopping needs. This business model works well in harsh and ideal market conditions, letting the company deliver growing value to its investors regardless of the economic cycle.
Dollarama stock has a business model that gives it defensive qualities, but that does not mean it exhibits slow growth. As of this writing, Dollarama stock trades for $192.09 per share, up by almost 300% in the last five years alone. The recent spike in market uncertainty has led to a slight pullback in its share prices, making Dollarama stock far too well-priced to ignore.
goeasy
goeasy Ltd. (TSX: GSY) is another company that can cater to people during periods of economic weakness. The $1.9 billion market-cap company provides alternative financing solutions to Canadians who cannot qualify for loans from traditional lenders. The subprime lending market continues to grow, and businesses like goeasy have a large addressable market to leverage.
Its charge-off rates have weighed on the stock in recent months, and that shows in the stock’s performance on the stock market in recent weeks. The company continues to expand its loan portfolio and customer base to position itself well for long-term growth. The stock also pays investors $1.46 per share each quarter, translating to a 5% dividend yield that you can lock into your self-directed portfolio today.
Foolish takeaway
Bear markets often lead to the share prices of many fundamentally solid businesses declining, creating opportunities for savvier investors to find bargains in the stock market. Trading at an 8.5% and 45.7% discount from 52-week highs, respectively, Dollarama stock and goeasy stock can be excellent investments to consider for your self-directed investment portfolio.
