The pandemic may have amplified our economic woes. Looking for a good stock to stake your money may be more complicated than searching for a needle in a haystack in these turbulent times. However, with due diligence, some stocks would always guarantee you returns and make it possible for you to achieve financial eldorado. Here, we present the top 5 Canadian stocks that are worth your money and time.
5. Dollarama (DOL)
Dollarama has been a bargain for investors over the past decade. At a time, it seemed like nothing could stop the stock from its upward trend. Although the pace of its growth has slowed, it still remains attractive to investors because of its growth opportunities. The discount store has 1,236 locations across Canada and plans to venture into the Latin American market.
Dollarama saw a boost this year, no thanks to COVID-19. Though the stock price has remained relatively stable this year, increasing by 6%., it has increased by 1,030% in the last ten years.
There is a chance that more shoppers could come to Dollarama, considering its low price as they will be looking to save cost in this recession.
4. Shopify (SHOP)
2020 can be described as the year of Shopify . This year alone, the stock has returned 139%, and over 3500% since its IPO in 2015.
If there is any stock that the pandemic has favoured, it is definitely Shopify. The cloud-based, multi-channel commerce platform witnessed an upsurge in merchant stores following the outbreak of COVID-19 as retailers are being forced to shut down.
Shopify offers one of the best “buy on the dip opportunities” because of its aggressive upward trajectory. Some analysts have tagged the stock “too expensive” to buy, but who cares provided you get returns on your investment.
Shopify is used by over half a million businesses in over 175 countries enjoying patronage from major brands such as Canadian Tire, General Electric (NYSE: GE), and Tesla (NASDAQ: TSLA) use Shopify’s (SHOP)product.
The company’s revenue is expected to grow by 33% next year. This may be considered as astonishing rate, not until you compare it with last year’growth rate which was just over 47%
Though an excellent company that promises bountiful returns, there remains skepticism whether the company would be able to retain its customer base considering increased competition from Amazon (NASDAQ: AMZN) and Alibaba (NYSE: BABA).
As such, investors are advised to trade with caution as one slip could lead to a correction in prices – and the market is notorious for that.
3. Kirkland Lake Gold (KL)
Gold’s shine never fades. So does this stock. If you had invested $10,000 a decade ago, it would have been worth $683,000. That’s a whopping 6,730%.
Last year, the Canadian mid-tier gold mining company’s share rose by 60% compared to a measly 18.6% this year. This is partly due to the slump of gold prices, which has recently witnessed an upsurge as investors seek safe havens for their funds. Undoubtedly, the stock price would increase further as the price of gold has surpassed its 2011 high of $1,800.
Though investors tend to shy away from Canadian gold companies because of their volatility and fluctuation production, Kirkland Lake (KL) has been able to churn out impressive figures. In 2016, the company acquired Australian gold miner, Newmarket Gold, for $1 billion.
Kirkland Lake also tried to acquire North American miner, Detour Gold (DGC) but rescinded on making an acquisition because all-in-sustaining-costs would be higher.
You can never go wrong with gold. Same with Kirkland, which has consistently beaten earnings estimates and has proven to be a best-in-class gold producer.
2. Boyd Group Services, Inc. (BYD)
Who says terrible cars can’t drive you to success? Well, that’s what Boyd has proven. The automotive company specializes in car and glass repairs with operations spanning across five Canadian provinces and over 25 states.
Boyd’s business strategy is buying up small-time repair shops, renovating them, reducing their expenses, and then slapping its brand on the store. This has proven to be extremely lucrative for its expansion program. At the beginning of 2010, Boyd had 90 collision repair centers. Today, it has 670 locations.
Though the YTD share price has slumped by 4.25%, the stock gained 24% over the past year and has been one of the best-performing stocks on the TSX Index. In the last five years, the stock value has soared to nearly 400%.
The reason why the pandemic did not severely hit the Canadian auto-glass company is because, irrespective of economic conditions, vehicle repairs will be made. Besides, most auto collision repairs are paid for via insurance claims, which provides a steady stream of revenue. This makes the company “recession resilient.”
Also, because most businesses would be struggling due to the pandemic’s effect, you can be sure that Boyd would get better bargains for small repair shops, which would definitely accelerate its expansion ambitions. The company’s revenue is expected to grow by 23.5% over the next year.
1. Constellation Software Inc. (CSU)
Constellation Software Inc. (CSU: TO) is one of those companies that lurks in the shadows, accuring huge profits without blowing its trumpet. Well, not for investors who have gotten a 4,060% return on their investments over ten years.
The company, founded by former venture capitalist Mark Leonard, is by far the largest priced TSX tech stock. Constellation Software Inc. specializes in acquiring, managing, and building vertical market software businesses. In the 2010 fiscal year alone, the company completed about 21 acquisitions.
Constellation’s YTD return is 23% to investors in 2020. The stock has been hitting all-time highs consistently and is not showing signs of easing on the gas. It is awe-inspiring for a stock which analysts have tagged as expensive – a term they have used for the last five years.
Rather than wait to buy the dip, why don’t you get on board the flight and take it to the moon?