2 Best Canadian Stocks With Room to Grow

WELL Health Technologies stock and Cineplex stock could deliver outsized shareholder returns and are worth having on your radar today.

| More on:

The onset of COVID-19 in 2020 led to significant volatility in the stock market as the broader market declined in February and March 2020. The stock market began to recover as the panic-induced sell-off frenzy wore off, and many Canadian stocks rose to pre-pandemic prices. Some publicly traded companies reached new highs as they led the rally.

The S&P/TSX Composite Index managed to consistently hit new all-time highs for most of 2021, making it seem impossible to find high-quality growth stocks that could deliver stellar shareholder returns. However, the index has dipped by 1.65% between August 11 and August 19, 2021.

Picking growth stocks in the current market conditions might not be easy, but it is not impossible to find good opportunities right now. Today, I will discuss two of the best Canadian stocks with plenty of room to grow.

WELL Health Technologies

WELL Health Technologies (TSX:WELL) became a publicly traded company in April 2016, and by January 2020, its share price grew by over 1,300%. At writing, the stock is trading for $7.37 per share, and it is up by a massive 6,600% from its initial public offering (IPO) five years ago. The company’s stellar growth was fuelled by favourable industry conditions created by the pandemic and its strategic acquisitions over the years.

The pandemic created significant tailwinds for the telehealth industry, and WELL Health Technologies was well-positioned to capitalize on the growing popularity of the industry. The momentum in its business has remained strong as the telehealth company saw its revenues through virtual services increase by over 430% in its most recent quarter.

The growing demand for telehealth services and its acquisition-based growth could provide it with much more room to grow in the coming years.

Cineplex

Cineplex (TSX:CGX) is a media and entertainment company that saw its revenues tank due to the pandemic. Unlike most sectors of the economy, the cinema giant could not recover from the sell-off frenzy as the demand for its services virtually dropped to zero within weeks. The ongoing vaccine rollout, easing pandemic restrictions, and rising consumer demand have finally allowed the company to offset its losses from 2020.

As the pandemic continues to subside, the company can continue to enjoy substantial returns from its theatres and entertainment venues. Cineplex is expected to benefit from increased foot traffic and a robust film release schedule as the world slowly shifts to a post-pandemic era.

At writing, Cineplex stock is trading for $12.45 per share. The stock is down by over 60% from its pre-pandemic valuation and now could be the right time to buy its shares at a discount.

Foolish takeaway

The increasing vaccine rollout, rebound in consumer demand, and continued economic expansion seems to be proceeding without much of a difference created by Delta variant fears. Given the current operating environment, WELL Health Technologies stock and Cineplex stock could deliver strong returns in the future.

Like any growth stock, these two assets come with their risks. Provided that you have the risk tolerance to bear possible short-term difficulties, these two stocks could be worth adding to your investment portfolio.

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.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends CINEPLEX INC.

More on Investing

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 »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Investing

Is Canadian National Railway Worth Buying for its 2.2% Dividend Yield?

Let's dive into whether Canadian National Railway (TSX:CNR) is a top buy for long-term investors at this point in the…

Read more »

nuclear power plant
Energy Stocks

Is Cameco Stock Still a Buy?

Cameco stock recently reported earnings that showed the Westinghouse investment is creating some major costs. But that could change.

Read more »

cloud computing
Dividend Stocks

Insurance Showdown: Better Buy, Great-West Life or Manulife Stock?

GWO stock and MFC stock are two of the top names in insurance, but which holds the better outlook?

Read more »

analyze data
Dividend Stocks

Here’s Why the Average TFSA for Canadians Aged 41 Isn’t Enough

The average TFSA simply isn't enough for most Canadians in their early 40s. Here's how to catch up.

Read more »

A plant grows from coins.
Dividend Stocks

The Smartest Dividend-Growth Stocks to Buy With $1,000 Right Now

New dividend-growth investors should consider CN Rail (TSX:CNR) stock and another top play if they're looking to build wealth over…

Read more »

concept of real estate evaluation
Dividend Stocks

How to Earn a TFSA Paycheque Every Month and Pay No Taxes on It

Canadian REITs can turn your TFSA into a monthly paycheque machine for life. Here's how Morguard North American Residential REIT…

Read more »

Start line on the highway
Investing

2 No-Brainer Growth Stocks to Buy Now With $5,000 and Hold Long Term

Market conditions today are ideal for growth investing, and two rising stocks are no-brainer buys in November.

Read more »