Beat the Market With These 3 High-Growth Stocks This Year

Why stocks like Waste Connections Inc. (TSX:WCN)(NYSE:WCN) and Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) are poised to outperform the TSX.

Every investor wants to own stocks that don’t just rise with the market but beat it in the long run. When the market falls, such stocks may not fall as much; and if they do, they are likely to recover quickly. Net effect: you end up with big returns over time.

Waste Connections Inc. (TSX:WCN)(NYSE:WCN), Shopify Inc. (TSX:SHOP)(NYSE:SHOP), and Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) are beating the TSX so far this year and should continue to do so thanks to the growth catalysts backing them.

Waste Connections: 100% returns in three years

On good days or bad, we continue to generate waste, which is why a stock like Waste Connections can remain resilient even during a down cycle.

Waste Connections is the third-largest solid waste company in the U.S. Between 2013 and 2017, the company more than doubled its revenue and adjusted free cash flow (FCF). The growth has a lot of steam left.

Waste Connections reported a whopping 37% jump in revenue and 45% jump in adjusted net income (excluding a big one-time tax benefit and impairment) for fiscal 2017 and gave an encouraging outlook for 2018.

Waste Connections has consistently generated higher FCF than net income, which, in my view, is a solid sign of financial fortitude. Management has also increased dividends every year since 2010 and is committed to long-term dividend increases. The stock has doubled in just three years and should continue to be a winner regardless of what the market does.

Shopify: Up 51% year to date

No matter how loud critics shout against Shopify, there’s no denying that the cloud-based e-commerce platform is growing its customer base and revenue at a torrid pace.

Shopify has all the ingredients for growth: a booming e-commerce industry, a focus on small and medium entrepreneurs who may not have a better alternative, tie-ups with big names like Amazon.com and Facebook, and a visionary CEO in Tobi Lütke who is an innovator and is keen to adopt emerging tech trends, like augmented reality.

In 2017, Shopify’s merchant base crossed 500,000, revenue grew 73%, and the operating loss came in at 7% of revenue compared with 10% of revenue in 2016. For 2018, Shopify projects a 45% growth in revenue at the midpoint.

Shopify may not break even any time soon, but that’s because the company is still in the early growth stages and is building its business, much like how Amazon.com started. During this stage, top-line growth is enough to propel the stock higher.

Teck Resources: 35% gains in six months

The recent recovery in commodity markets has solidified Teck Resources’s prospects. In 2017, Teck generated record revenue of $12 billion and record operating cash flow of $5.1 billion. The miner cut debt, declared a supplemental dividend, and extended its ongoing share-repurchase program.

The biggest move, however, was the advancement of Teck’s Fort Hill Oil Sands mine, which adds another key commodity, oil, to the company’s portfolio, thereby diversifying its revenue stream and giving it an edge over pure mining rivals.

Fort Hills has already stated production and is expected to hit 90% capacity by the end of this year. Meanwhile, Teck is guiding for lower costs and capital expenditures for 2018, which should further support its bottom line and cash flows. That should help the stock stay steady and inch higher, even if the market flips.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Neha Chamaria has no position in any of the stocks mentioned. David Gardner owns shares of Amazon and Facebook. Tom Gardner owns shares of Facebook and Shopify. The Motley Fool owns shares of Amazon, Facebook, Shopify, and SHOPIFY INC. Shopify is a recommendation of Stock Advisor Canada.

More on Metals and Mining Stocks

construction workers talk on the job site
Metals and Mining Stocks

2 No-Brainer Mining Stocks to Buy With $200 Right Now

You can buy these top Canadian mining stocks with just a $200 investment right now to start your long-term wealth…

Read more »

Concept of multiple streams of income
Stocks for Beginners

Lock Up This 9.2% Dividend Yield From a Top Royalty Stock

Royalty stocks have a strong advantage when it comes to creating passive income for investors. But this one has the…

Read more »

Safety helmets and gloves hang from a rack on a mining site.
Metals and Mining Stocks

Is First Quantum Minerals Stock a Good Buy Right Now?

First Quantum is a TSX stock that trades 61% below all-time highs. However, the mining stock still trades at a…

Read more »

nugget gold
Metals and Mining Stocks

The Best Gold Stock to Invest $1,000 in Right Now

Here are two of the best Canadian gold stocks that can yield some eye-popping returns in the long run.

Read more »

nugget gold
Stocks for Beginners

The Ultimate Mining Stock to Buy With $1,000 Right Now

This mining stock just saw a drop, but don't let that keep you from diving in. This miner is due…

Read more »

A plant grows from coins.
Metals and Mining Stocks

Canadian Mining Stocks: Buy, Sell, or Hold?

Explore 2025’s top Canadian mining stocks – gold, uranium, and base metals offer big potential in a dynamic, commodity-driven market.

Read more »

farmer holds box of leafy greens
Metals and Mining Stocks

3 Reasons to Buy Nutrien Stock Like There’s No Tomorrow

Nutrien stock has lost 34% of its value just this year alone and looks incredibly cheap today. Yet, secular trends…

Read more »

Canada national flag waving in wind on clear day
Tech Stocks

Trump Trade: Canadian Stocks to Watch

With Trump returning to the presidency, there are some sectors that could boom in Canada, and others to watch. But…

Read more »