These 3 Stocks Could Grow (at Least 5X) in the Next Decade if They Repeat History
Written by Christopher Liew, CFA at The Motley Fool Canada
Investors can’t make the past performance of stocks the basis for their buying decisions today, because it doesn’t guarantee future results. If you go back 10 years, or to 2013, TFI International (TSX:TFII), Pollard Banknote (TSX:PBL), and Ballard Power Systems (TSX:BLDP) have delivered astronomical returns to shareholders.
Their share prices could grow five times more in the next decade if they repeat history. Otherwise, you’d be imagining a dream scenario. In reality, you’d invest in these stocks in 2023, because they outperform the broader market year to date.
TFI trades at $154.26 per share (+13.75% year to date) and pays a 1.23% dividend. Today’s stock price is 794.3% higher than it was 10 years ago ($17.25 per share). The $13.37 billion company is a well-established transportation and logistics company in North America. Its network of wholly owned operating subsidiaries is fast growing.
For the full-year 2022, total revenue and net income climbed 22% and 9.1% to $8.81 billion and $823.2 million versus the full-year 2021. According to its chairman, president, and chief executive officer (CEO), Alain Bédard, the unique positioning of TFI produces remarkable success during turbulent times.
TFI’s competitive advantages include business line diversity and exposure to attractive niche markets. Management’s several self-help initiatives also contribute to business growth. Bédard added that the relative stability, margin expansion, and free cash flow of TFI reflect the team’s tireless efforts.
The net cash flow from operations increased 14% year over year to $971.6 million. Also, in the fourth quarter (Q4) of 2022, the board approved and declared a 30% increase in the quarterly dividend.
Pollard Banknote also had stellar returns (+890.6%) in 10 years, given that the stock price was only $2.13 then. As of this writing, you can purchase the stock at $21.10 per share and partake in the 0.76% dividend. The $567.96 million company provides products and solutions to lottery and charitable gaming industries globally.
The business thrives, as evidenced by the record revenue last year. In 2022, the top line grew 5.1% year over year to $482.3 million, although net income declined slightly by 2% to $19.3 million. Management said that consumer demand in most lines of business remains strong. Also, Pollard expects to realize the positive impact of new selling prices in the latter part of 2023 and into 2024.
Ballard Power Systems was a perennial TSX30 winner from 2019 to 2021 but missed joining the list in 2022. At $7.21 per share, the growth stock is up 11.27% year to date. Also, the current stock price is 567.7% higher than it was in March 2013.
The $2.15 billion manufactures proton exchange membrane fuel cells that enables the electrification of mobility. The fuel cells are for buses, commercial trucks, trains, marine vessels, and stationary power. Management is confident that Ballard will soon be on the path to profitability.
Ballard’s president and CEO Randy MacEwen said, “With an increasingly constructive policy landscape for hydrogen globally, we are excited by the growing end customer interest to decarbonize mobility and stationary power applications with fuel cells.”
Bull market gains
The market is very uncertain, although many investors still hope for better things ahead. If ever the bull market returns, the stocks in focus might deliver gains comparable to their 10-year returns.
The post These 3 Stocks Could Grow (at Least 5X) in the Next Decade if They Repeat History appeared first on The Motley Fool Canada.
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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Pollard Banknote. The Motley Fool has a disclosure policy.