Oil and natural gas prices climbed last week after peace talks between the United States and Iran failed to produce a breakthrough. Concerns that higher energy prices could fuel inflation and delay potential rate cuts weighed on investor sentiment, pulling the S&P/TSX Composite Index down 1.3% last week.
Despite the uncertain outlook, these three stocks stand out as strong candidates to deliver solid returns over the next three years, supported by resilient businesses and promising growth prospects.
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Savaria
Savaria (TSX: SIS) would be my first pick. The company designs, manufactures, and installs accessibility solutions for both residential and commercial markets, and distributes its products globally through a broad manufacturing footprint and sales network. Demand for its offerings continues to grow, supported by an aging population and increasing adoption of in-home accessibility solutions.
To capitalize on this trend, Savaria is investing in product innovation and pursuing strategic partnerships to expand its capabilities and market reach. Backed by these initiatives, the company expects its revenue to grow at a 12% annualized rate through 2030, reaching $1.6 billion. Management also aims to maintain an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin above 20%, with adjusted EBITDA per share projected to grow at a 10.4% annualized rate to $4.25.
In addition to its growth outlook, Savaria pays a monthly dividend yielding 1.9%, making it an attractive option for long-term investors.
Northland Power
Northland Power (TSX: NPI) is another stock I believe is an excellent buy right now. The company develops, owns, and operates a diversified portfolio of energy assets with a total production capacity of 3.5 gigawatts. Notably, about 95% of its revenue is secured through long-term power purchase agreements (PPAs), making its financial performance less sensitive to market volatility.
The global transition toward clean energy continues to create strong long-term growth opportunities for Northland Power. The company plans to invest between $5.8 billion and $6.6 billion over the next five years to expand its asset base and nearly double its capacity to 7 gigawatts. In addition, ongoing cost-optimization initiatives could generate annual savings of approximately $50 million starting in 2028.
With these growth and efficiency measures in place, Northland Power is well-positioned to deliver improved financial performance and stock price appreciation. The company also pays a monthly dividend of $0.06 per share, yielding about 3.1% and enhancing its overall appeal to long-term investors.
Hydro One
Hydro One (TSX: H) would be my final pick. As a pure-play electricity transmission and distribution company, with about 99% of its operations rate-regulated, it delivers stable financial performance and generates predictable, steady cash flows. The utility company has also expanded through self-funded organic growth, supporting earnings increases, share price appreciation, and consistent dividend payments.
Over the past five years, Hydro One has delivered total returns of more than 125%, reflecting an impressive annualized rate of 17.6%. It has also raised its dividend at an annualized rate of 5.2% over the last eight years and currently offers a forward yield of 2.3%.
Looking ahead, rising electricity demand – driven by economic growth, transportation electrification, and increasing investment in AI infrastructure – positions Hydro One well for continued expansion. To capitalize on this trend, the company is advancing its $11.8 billion capital investment plan, which could grow its rate base to $32.1 billion by the end of 2027.
Given its regulated business model, reliable dividend growth, and solid long-term outlook, Hydro One appears to be an attractive investment at current levels.
