Long-term investing is a proven approach to wealth creation, allowing investors to harness the power of compounding while minimizing the impact of short-term market volatility. It also offers simplicity, as investors can avoid constantly monitoring their portfolios or reacting to temporary market movements. However, successful long-term investing requires a disciplined focus on quality. Investors should seek out companies with durable business models, consistent financial performance, strong competitive advantages, and compelling long-term growth prospects.
With this in mind, let’s explore two top Canadian stocks that I believe are well-positioned to generate superior returns over the long run.
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Dollarama
First on my list is Dollarama (TSX: DOL), a leading discount retailer with 1,719 stores across Canada and another 410 in Australia. Its highly efficient direct-sourcing model gives the company greater bargaining power while eliminating intermediary costs. Combined with streamlined operations and an optimized logistics network, this model helps Dollarama control expenses and offer a broad range of products at attractive price points. As a result, the retailer has demonstrated remarkable resilience, consistently generating healthy same-store sales across different economic environments.
Dollarama also has a significant runway for further expansion. Management expects to increase its Canadian and Australian store counts to 2,200 and 700, respectively, by the end of fiscal 2034. The company is also developing a new logistics hub in Calgary, which should strengthen its distribution capabilities and support further expansion across Western Canada. The facility could become operational by the end of next year. Given Dollarama’s capital-efficient model, relatively low maintenance capital requirements, rapid store-level sales ramp-up, and short payback periods, this continued expansion could provide a sustained boost to both revenue and earnings.
Beyond its core markets, Dollarama has additional growth potential through its 60.1% stake in Dollarcity, which operates 752 stores across five Latin American countries. Dollarcity is pursuing an aggressive expansion strategy and hopes to grow its store count to 1,050 by the end of 2031. Furthermore, Dollarama can increase its ownership stake to 70% by exercising its option by the end of next year, potentially allowing it to capture a greater share of Dollarcity’s future growth.
With a proven and capital-efficient business model, multiple avenues for geographic expansion, and significant exposure to Dollarcity’s growth, Dollarama has a compelling long-term growth profile. Moreover, the recent pullback in its share price could provide an attractive entry point for investors seeking to build wealth over the long run.
Waste Connections
Another stock that is well positioned to deliver attractive long-term returns is Waste Connections (TSX: WCN), a leading provider of non-hazardous solid waste management services across Canada and the United States. The company operates predominantly in secondary and exclusive markets, where limited competition provides greater pricing power and supports attractive margins. This differentiated business model has enabled WCN to maintain resilient profitability while consistently expanding its operations through strategic acquisitions and organic growth.
WCN is also leveraging its strong financial position to accelerate its acquisition-driven growth strategy. So far this year, the company has completed acquisitions expected to contribute approximately $100 million in annualized revenue, while potential transactions in its pipeline could add another $30 million. With a healthy balance sheet and a robust acquisition pipeline, management expects 2026 to be an above-average year for acquisitions. Meanwhile, WCN continues to expand its renewable natural gas (RNG) platform and plans to increase the number of operational facilities from 7 to 12 by the end of this year, creating another avenue for long-term growth.
Beyond its expansion initiatives, the company is investing in robotics, optical sorting systems, business analytics, AI-powered productivity tools, and AI-driven pricing optimization. These investments could enhance operational efficiency, strengthen pricing discipline, and support further margin expansion over time.
Given the essential nature of its services, resilient business model, strong financial position, and multiple avenues for growth, I believe WCN is well positioned to generate compelling returns for long-term investors.
