3 Stocks That Could Be Worth More Than SmartCentres REIT (TSX:SRU.UN) by 2030

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3 Stocks That Could Be Worth More Than SmartCentres REIT by 2030

Plenty of good growth stocks have gotten off track recently, but as soon as the market recovers and starts a steady bullish phase, they may experience a consistent rise in their worth.

Adam Othman ❯

Adam is a value investor who is always on the hunt for fantastic undervalued companies that he can share with Motley Fool readers. He follows Warren Buffett and Charlie Munger's investment advice and has completed the Canadian Securities Course. When he's not investing, Adam can usually be found traveling or skiing.

Published November 6, 2022 11:00 am EST

| More on: CIAGSYSRU.UNSVI

SmartCentres REIT (TSX:SRU.UN) is one of the largest retail (and now mixed-use) real estate investment trusts (REITs) in Canada right now. The company was worth roughly $5.5 billion up until the first quarter of the year, but this value has dropped thanks to the 19.5% price dip. But even if we keep that value as the benchmark, at least three TSX stocks have a strong chance of reaching this value by the end of this decade.

Champion Iron

Champion Iron (TSX:CIA) is an Australian iron ore company that mainly operates in Quebec. The stock has gone through multiple growth cycles in the last eight years but has mostly gone up. Right now, it’s dipping and trading at a 45% discount from the highest peak it has achieved yet (Apr. 2022). And even taking this dip into account, the returns in the past five years have been over 280%.

The company is currently worth roughly $2.1 billion, and if it manages to keep up the growth pace, it may go beyond SmartCentres’s current value well before 2030. And in addition to its solid growth potential, it also offers dividends at a yield of about 4.9%. Buying it now, at the discounted price, can boost the return potential, so you may consider buying before it reverses course for a bull market.

StorageVault Canada

If you are looking for an investment option from a different sector, StorageVault Canada (TSX:SVI) is a strong contender. The company is already worth $2.3 billion, and if it can repeat the performance of the last five years, in which the stock grew by about 171%, it may also go beyond the $5.5 billion mark before 2030. It also pays dividends, but the yield is relatively low at 0.18%.

The stock offers more consistent growth than Champion Iron and relatively more safety. The underlying asset for StorageVault Canada stores that offer storage spaces, and it’s a leader in this space in Canada.

It has already acquired multiple businesses and is slowly growing its portfolio and reach, making its position even stronger in this niche market segment. This may lead to a continuation of the current growth pattern.

goeasy

Financial stocks in Canada are coveted more for their stability and dividends than their capital-appreciation potential, but goeasy (TSX:GSY) is an exception. It is a potent growth stock with a consistent appreciation pattern spreading well over a decade, though currently, it’s in correction mode. And since it’s trading at a discount thanks to the correction, the yield has gone up to an attractive number of 3.2%.

But it’s the growth potential that’s the primary strength of goeasy as an investment. Even with the current 49% slump from the peak, the growth in the past five years has been over 230%. It has a market capitalization of about $1.75 right now, and if it grows at the pace it did before the pandemic, it can easily surpass the market cap of SmartCenters REIT by the end of this decade.

Foolish takeaway

The current projection assumes that there isn’t another major stock market crash on the horizon, because it may disrupt the growth pattern of these stocks. The reason SmartCentres was chosen as the benchmark was that it usually has a steady valuation and market capitalization, which doesn’t fluctuate too much in a healthy market.