2 Top Canadian Growth Stocks to Buy in March 2021

Consider buying these market-beating Canadian growth stocks before they run away from you!

| More on:

The following Canadian growth stocks outperformed the market by multiple folds over the past 10 years. Both are trading at attractive valuations such that they’re likely to outperform again over the next five to 10 years!

Buy this Canadian growth stock in March 2021

Cargojet (TSX:CJT) stock seldom goes on sale. It is Canada’s leader in providing time-sensitive, premium air cargo services to major cities across North America.

Thanks to the advent of e-commerce, Cargojet has been a superb growth stock. It even outperformed Amazon stock in the past five and 10 years! In the last five years, CJT stock turned a $10,000 investment into about $76,880.

CJT’s stock price doubled last year alone due to greater demand for its services during the COVID-19 pandemic. Perhaps the market is expecting milder growth this year. Followed by the company releasing its fourth-quarter and full-year 2020 results yesterday, the stock stumbled.

In fact, since Cargojet stock’s all-time high of $250 in November 2020, it has been in a downward trend and has retreated about 30%. Now could be an excellent time to start buying the dip and get into the name that will continue to benefit from the e-commerce trend. The consensus among analysts is that the growth stock can appreciate about 56% over the next 12 months.

In 2020, Cargojet increased revenues by 37% to $668.5 million, while gross margins more than doubled to $250.5 million. Its adjusted EBITDA, a cash flow proxy, rose 87% to $291.4 million with the adjusted EBITDA margin improving 11.5% to 43.6%. Adjusted free cash flow was $196.8 million — four times what it was in 2019.

Yesterday, the stock traded at about $175 per share at market close. Thankfully, the company raised gross proceeds of about $350 million from an equity offering at a stock price about 21% higher earlier this year. So, it’s unlikely to need to raise more capital from the stock market anytime soon. The proceeds will go to expanding its domestic capacity and facilities, pursuing its growth in the U.S. and internationally, and repaying debt.

Buy this dividend-growth stock in March 2021

You may be puzzled as to why I recommend Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) next as a growth stock. Utilities are usually seen as low-growth, high-yield investments.

However, since its inception more than 10 years ago, and over the past five years, this high-growth utility stock has outperformed its peers and the market. Specifically, BIP delivered annualized returns of about 24% since inception.

BIP pays a nice dividend (of 4%) as a utility should, and it will grow faster than other utilities. Because of this, I’m labelling it as a growth stock in the utility space.

BIP owns, invests, and operates in high-quality global infrastructure. Its largest segments are utilities and transport that contribute to about 60% of its funds from operations, from which it pays out dividends.

One growth area BIP investors should be excited about is its data infrastructure, which includes data storage, transmission, and distribution. It is the utility’s fastest-growing segment. This segment’s FFO contribution climbed 44% last year thanks to M&A and organic growth and is quickly becoming a meaningful part of the business, totaling 14% of the utility’s overall FFO for 2020.

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 Kay Ng owns shares of Amazon, Cargojet, and Brookfield Infrastructure Partners. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and CARGOJET INC. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS and Brookfield Infrastructure Partners and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.

More on Dividend Stocks

profit rises over time
Dividend Stocks

These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

Two Dow Jones stocks are screaming buys but Canadians must hold them in an RRSP or RRIF to avoid paying…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Use Your TFSA to Earn Ultimate Passive Income

If you have a TFSA, then you have the key to creating ultimate passive income. All you need is a…

Read more »

Confused person shrugging
Dividend Stocks

Better Buy: Fortis Stock or Hydro One Stock?

Let's do a compare and contrast of these two top utilities stocks right now, shall we?

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

Boost Your Passive Income: 2 Canadian High-Yielders at a Bargain

Nutrien (TSX:NTR) stock and another play that appear like fantastic dividend bargains in mid-November.

Read more »

3 colorful arrows racing straight up on a black background.
Dividend Stocks

TSX Stocks Soaring Higher With No Signs of Slowing

Three TSX stocks continue to beat the market and could soar higher in an improving investment landscape.

Read more »

Hourglass and stock price chart
Dividend Stocks

Goeasy Stock: Is It Heading for a 52-Week High?

Goeasy stock has been edging higher, especially after another record-setting earnings report. So are 52-week highs in sight?

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Here’s the Average TFSA Balance at Age 44 in Canada

You can invest your TFSA in funds like the BMO Canadian High Yield Dividend ETF (TSX:ZDV) to grow the balance.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

The Best Telecom Stock to Buy Before 2025

Choosing the safest stock from a decimated sector can be tricky, but if there is a reasonable chance of full…

Read more »