Advertisement
Canada markets closed
  • S&P/TSX

    22,465.37
    +165.57 (+0.74%)
     
  • S&P 500

    5,308.13
    +4.86 (+0.09%)
     
  • DOW

    39,806.77
    -196.82 (-0.49%)
     
  • CAD/USD

    0.7341
    -0.0008 (-0.10%)
     
  • CRUDE OIL

    79.65
    -0.15 (-0.19%)
     
  • Bitcoin CAD

    94,869.41
    +4,479.94 (+4.96%)
     
  • CMC Crypto 200

    1,488.10
    +133.69 (+9.87%)
     
  • GOLD FUTURES

    2,430.60
    -7.90 (-0.32%)
     
  • RUSSELL 2000

    2,102.50
    +6.78 (+0.32%)
     
  • 10-Yr Bond

    4.4370
    +0.0170 (+0.38%)
     
  • NASDAQ

    16,794.88
    +108.91 (+0.65%)
     
  • VOLATILITY

    12.15
    +0.16 (+1.33%)
     
  • FTSE

    8,424.20
    +3.94 (+0.05%)
     
  • NIKKEI 225

    39,069.68
    +282.30 (+0.73%)
     
  • CAD/EUR

    0.6756
    +0.0001 (+0.01%)
     

3 of the Best Canadian Stocks I’d Buy and Hold Forever

stock research, analyze data
Image source: Getty Images

Written by Sneha Nahata at The Motley Fool Canada

The TSX boasts several fundamentally strong stocks that have consistently delivered above-average returns and created significant wealth for their shareholders. While these Canadian stocks have experienced considerable gains, their resilient business model and potential to generate profitable growth suggests they could continue to deliver notable capital gains and dividend income in the long run.

Against this background, here are three of the best Canadian stocks to I’d buy and hold forever.

Shopify

Shopify (TSX:SHOP) is poised to capitalize on the transition towards omnichannel selling models. The technology company provides infrastructure for multi-channel commerce. Shopify’s software enables merchants to market and sell their products across multiple platforms. This, in turn, attracts new merchants, helps retain revenue from existing merchants, and increases sales to both new and existing ones.

ADVERTISEMENT

Shopify’s multi-channel platform and growing share of e-commerce in overall retail sales augur well for long-term growth. Moreover, its focus on driving innovation and developing new solutions to extend its platform’s functionality is positive. Further, Shopify is integrating artificial intelligence (AI) technology into its products and platform, which will likely boost its volumes and revenue.

It’s worth noting that Shopify is transitioning towards an asset-light business model, which will ease pressure on margins and enable the company to deliver sustainable profit in the long term. Overall, Shopify’s durable revenue growth, focus on adding more merchants to its platform (merchants outside North America increased 35% in 2023), innovation, increase in subscription fees, and higher take rate will drive its financials and share price.

goeasy

goeasy (TSX:GSY) is one of my top picks for creating wealth in the long term. Shares of this financial services company are known for consistently generating stellar returns and outperforming the broader markets. goeasy provides loans to subprime borrowers and benefits from a large addressable market. In addition, its ability to grow loans and manage credit risk effectively supports its top- and bottom-line growth.

goeasy’s loan book has grown at a compound annual growth rate of 35% between 2019 and 2023. Meanwhile, its free cash flows sport a CAGR of 33% during the same period. Thanks to its stellar growth, goeasy stock has increased at a CAGR of about 34% in the last five years, delivering capital gains of approximately 333%. Furthermore, its growing earnings base has enabled it to consistently pay and increase its dividends for years.

Looking ahead, goeasy stock will likely benefit from its growing consumer loan portfolio. The company’s omnichannel offerings, wide product range, diversified funding sources, and geographical expansion will likely drive its top line. Further, leverage from higher revenue, stable credit performance, and improving efficiency will cushion its earnings and drive its share price higher.

Dollarama 

Dollarama (TSX:DOL) is a compelling long-term investment due to its defensive business model and high growth. The discount retailer sells a wide variety of products at low and fixed price points, making its business model relatively resilient and stabilizing its performance. Further, Dollarama’s ability to grow earnings in all market conditions and focus on rewarding shareholders with share repurchases and higher dividends support my bull case.

Dollarama’s revenue and earnings have been growing at a double-digit rate since fiscal 2011. Thanks to its reliable financial performance, Dollarama stock has gained about 697% in the past decade and consistently outperformed the broader equity market. The company uninterruptedly increased its dividend during the same period.

In the coming years, Dollarama’s extensive and growing store base, focus on value pricing, direct sourcing strategy, and product expansion will likely fuel its financials and, thereby, its share price.

The post 3 of the Best Canadian Stocks I’d Buy and Hold Forever appeared first on The Motley Fool Canada.

Should you invest $1,000 in Dollarama right now?

Before you buy stock in Dollarama, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Dollarama wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $15,578.55!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 32 percentage points since 2013*.

See the 10 stocks * Returns as of 3/20/24

More reading

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.

2024