Advertisement
Canada markets close in 1 hour 15 minutes
  • S&P/TSX

    21,732.02
    +89.15 (+0.41%)
     
  • S&P 500

    5,054.28
    +2.87 (+0.06%)
     
  • DOW

    37,945.43
    +146.46 (+0.39%)
     
  • CAD/USD

    0.7267
    +0.0034 (+0.48%)
     
  • CRUDE OIL

    82.76
    -2.60 (-3.05%)
     
  • Bitcoin CAD

    85,091.22
    -1,386.41 (-1.60%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,391.70
    -16.10 (-0.67%)
     
  • RUSSELL 2000

    1,961.12
    -6.36 (-0.32%)
     
  • 10-Yr Bond

    4.5810
    -0.0780 (-1.67%)
     
  • NASDAQ

    15,809.90
    -55.36 (-0.35%)
     
  • VOLATILITY

    17.98
    -0.42 (-2.28%)
     
  • FTSE

    7,847.99
    +27.63 (+0.35%)
     
  • NIKKEI 225

    37,961.80
    -509.40 (-1.32%)
     
  • CAD/EUR

    0.6804
    -0.0004 (-0.06%)
     

3 Growth Stocks I’d Buy With $3,000

Growth from coins
Image source: Getty Images

Written by Sneha Nahata at The Motley Fool Canada

Investors looking for shares that would multiply their investments could consider investing in growth stocks. While growth stocks tend to outperform broader market indices, it’s important to note that they are highly volatile.

Therefore, one should exercise caution in selecting growth stocks. Investors can consider shares of fundamentally strong companies with the potential to rapidly grow their sales and earnings. Against this backdrop, here are three Canadian stocks I’d buy with $3,000.

goeasy

goeasy (TSX:GSY) is one of my top picks to create wealth in the long term. It has consistently delivered stellar returns and outperformed the broader market average by a wide margin. For instance, this growth stock has gained over 333% in five years. This implies that shares of this subprime lender sport a compound annual growth rate (CAGR) of 34%.

ADVERTISEMENT

The significant appreciation in goeasy stock is based on the company’s ability to consistently deliver double-digit sales and earnings growth. For instance, goeasy’s five-year revenue (as of December 31, 2023) CAGR is 19.82%. At the same time, its earnings per share (EPS) increased at a CAGR of 31.9%.

Looking ahead, the momentum goeasy’s business will likely sustain, driven by higher loan originations, omnichannel offerings, a large addressable market, solid underwriting capabilities, and efficiency improvements. In addition, its strong balance sheet, geographic expansion, and diversified funding sources will support its growth.

Further, goeasy has raised dividends for nine consecutive years. Its growing earnings base indicates that goeasy will likely boost its shareholders’ returns with higher dividends in the coming years.

Aritzia

Aritzia (TSX:ATZ) stock has regained some of its lost ground in 2024. However, it is still trading well below its 52-week high. The moderation in its growth rate weighed on its share price. However, the company’s focus on expanding its footprint by opening new boutiques, introducing new styles, and omnichannel offerings will likely re-accelerate its growth.

Aritzia aims to launch eight to 10 new boutiques annually through FY27. These additions will contribute positively to revenue and profitability as they are expected to achieve breakeven swiftly. Additionally, the company is enhancing its online customer experiences and expanding omnichannel offerings like in-store shipping and online ordering with in-store pickup.

Further, Aritzia has doubled its style offerings over the last five years, broadened its product range, and entered the menswear market. These endeavours position the company to deliver mid-teens sales growth in the foreseeable future. With increased sales, reduced inventory management expenses, and operational efficiencies, Aritzia could deliver double-digit earnings growth, which is expected to bolster its stock performance.

Dollarama

Dollarama (TSX:DOL) is another excellent growth stock. It is less volatile as it operates a defensive business and offers products at low and fixed price points. This retailer’s value pricing strategy, broad product range, and extensive store base have consistently driven traffic and, in turn, its sales and earnings.

Thanks to its solid financials, Dollarama stock has grown at a CAGR of 24.3% in the past five years, delivering a return of nearly 197%. Further, it has returned cash to its shareholders through increased dividend payments.

The momentum in its sales and earnings will likely be sustained, driven by its value pricing strategy, growing store base, and focus on reducing merchandise costs. Moreover, this is likely to distribute higher dividends in the coming years.

The post 3 Growth Stocks I’d Buy With $3,000 appeared first on The Motley Fool Canada.

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

Before you buy stock in Aritzia, 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 Aritzia 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 $17,988!*

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 35 percentage points since 2013*.

See the 10 stocks * Returns as of 1/24/24

More reading

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

2024