Building long-term wealth through stocks doesn’t necessarily require owning dozens of different companies. While diversification remains an important way to manage portfolio risk, investors can also build a strong portfolio by focusing on a select group of financially sound businesses with attractive long-term growth potential.
Rather than spreading your capital across 100 stocks, focusing on a few high-quality companies may make it easier to build a focused, resilient portfolio.
With that in mind, here are three Canadian stocks that could form the foundation of a long-term investment portfolio.
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Aritzia
Aritzia (TSX: ATZ) could be an appealing long-term investment for investors focused on wealth creation. The luxury fashion retailer has a solid history of delivering strong growth and outperforming the broader equity market. After a notable rise, Aritzia stock has recently weakened. This pullback provides an opportunity to buy its shares at a more attractive valuation.
Since fiscal 2022, Aritzia has grown revenue at an annualized rate of roughly 25%, while earnings have increased by approximately 22% annually. Several initiatives could help sustain this momentum.
A key growth driver is the company’s U.S. expansion. For fiscal 2027, management plans to open about 12 to 13 new boutiques, including 11 to 12 in the U.S. Strong customer demand, higher store traffic, and continued strength in the e-commerce platform could support revenue growth.
Its digital investments provide another growth avenue by enhancing the customer experience and engagement. Meanwhile, new boutiques can expand the brand’s reach and generate additional sales.
Aritzia also has opportunities to improve profitability through greater full-price sales, better inventory management, and disciplined operating expenses.
Overall, Aritzia’s track record of revenue and earnings growth, ongoing boutique expansion, particularly in the U.S., and potential for further sales and margin improvement provide several long-term growth drivers.
Dollarama
Dollarama (TSX: DOL) is a stock that makes sense for investors looking to hold a quality business for the long run. The company has a relatively defensive business model, which has helped it remain resilient even when economic conditions are challenging. Its low, fixed prices, a wide range of products, and an expanding selection of higher-margin private-label items continue to attract shoppers while supporting the company’s profitability.
Its resilient business model and store expansion have helped Dollarama deliver steady revenue and earnings growth over the years. The retailer has also increased its dividend every year since 2011. The stock has also generated strong returns over the past five years, although it has recently pulled back.
Looking ahead, Dollarama continues to open new stores, while its international expansion provides another potential source of growth. Further, its value pricing, partnerships with third-party delivery platforms, and efficient sourcing could further support sales and margins as the business expands. Overall, Dollarama is poised to deliver solid growth, return cash to shareholders, and deliver strong capital gains.
Celestica
Celestica (TSX: CLS) could be a compelling candidate for a diversified three-stock portfolio. It offers exposure to the expanding artificial intelligence (AI) infrastructure market.
Solid momentum in its Connectivity & Cloud Solutions (CCS) division is driving its growth. Celestica’s CCS segment’s revenue climbed 84% year over year in the second quarter, making it the company’s largest revenue contributor. Communications revenue grew 62%, driven by strong demand for 800G networking switches and continued sales of 400G products. Enterprise revenue surged 167%, supported by AI and machine-learning deployments for a major hyperscaler and improving storage demand.
The company’s growth outlook also remains strong, supported by rising hyperscaler demand. Celestica is positioned to benefit from broader adoption of 800G networking technology, while its initial 1.6-terabit programs are moving into high-volume production.
Enterprise revenue is expected to grow rapidly, reflecting continued hyperscaler investment in AI and machine-learning infrastructure. A recovery in storage demand could provide an additional boost.
With strong AI-related momentum and a recent pullback in its share price, Celestica remains a solid buy-and-hold stock.
