1 of the Top TSX Growth Stocks to Buy Right Now

Here’s why Boyd Group (TSX:BYD) is one of the best growth stocks long-term investors should consider in this upside-down market right now.

| More on:

The Canadian stock market has actually held up quite well, despite a rocky 2022. The energy- and financials-heavy composition of the TSX resulted in a decline of only 6% during the past year. However, the market is expected to grow decently in 2023, as per many analysts.

Indeed, 2022 was not a great year for growth stocks. Many investors abandoned faith in high-growth companies as a result of central bank tightening and fears of a looming recession. Thus, the transition toward value and away from growth stocks is one that has led value investors to outperform their growth counterparts for the first time in a while.

That said, these broad-based declines have improved the valuation metrics of many growth stocks, resulting in an interesting setup in 2023. One top growth stock I think is worth considering given this backdrop is Boyd Group (TSX:BYD). 

Here’s why.

BYD stock has bright potential ahead 

Taking a look at the chart above, it’s clear that Boyd hasn’t seen the drop-off many of its growth peers have. That’s for good reason.

This is a company that’s continued to see its valuation surge at a rate that exceeds the market for a very long time. The company’s approximate doubling of value over the past five years (excluding dividends) is notable. And that’s with earnings per share that have actually declined on a year-over-year basis.

The reason for this stock price outperformance is consensus expectations around forward growth. Wall Street projections see BYD stock growing annual earnings in the 65% range for the coming year. So long as the company remains on its longer-term growth trajectory, this is a stock that’s likely to continue moving higher.

Bottom line 

Boyd is among the leading growth stocks I think is worthy of consideration in this difficult market. As a leading purveyor of glass and collision repair shops in North America, the thesis is simple. More people means more cars on the road. And with the pandemic in the rear-view mirror, this thesis holds water more than ever.

As Boyd continues to consolidate this fragmented industry, I think more upside could be on the horizon. This is a company that funds most of its acquisitions through the cash flow of its underlying businesses. Thus, so long as Boyd can continue to deliver outsized returns, its share price should remain on this trajectory. It’s one of the top growth stocks on my watch list right now for this reason.

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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Boyd Group Services. The Motley Fool has a disclosure policy.

More on Investing

Canadian dollars are printed
Dividend Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

Toronto-Dominion Bank (TSX:TD) stock could do well in the year ahead.

Read more »

monthly desk calendar
Dividend Stocks

Monthly Income: Top Dividend Stocks to Buy in November

Here are two of the best monthly dividend stocks in Canada you can buy in November 2024 and hold for…

Read more »

hand stacks coins
Investing

A Top TSX Stock to Buy Now for Real Wealth Later

Intact Financial (TSX:IFC) stock is a fantastic dividend-growth play for the next 15 years and beyond.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Thursday, November 14

The U.S. wholesale inflation data and Fed chair Jerome Powell’s remarks about the economy will remain on TSX investors’ radar…

Read more »

Man data analyze
Tech Stocks

3 Reasons Celestica Stock Is a Screaming Buy Now

These three reasons make Celestica stock a screaming buy for long-term investors.

Read more »

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 »