1 Stock With Millionaire-Making Potential

There are few companies in this world that can actually make someone a millionaire. Long-term investing is the usual approach to investing that we here at the Motley Fool aim for. However, every once in a while we come across a stock or two that could surge for investors.

Today, we’re going to focus on Canadian Pacific Kansas City (TSX:CP) stock, and why it certainly has the chance to provide millionaire status for investors.

Over a decade of superior growth

CP stock was circling the drain over a decade ago, until a new chief executive officer swooped in to save the day. Hunter Harrison streamlined the company, making cuts practically everywhere and putting that money to good use. This included reinvesting into infrastructure, as well as strengthening its bottom line.

When he left, the new head Keith Creel took over the mantel, and with it the same belief system. One that allowed the company to see more cash on the books, reach targets, and finally put aside enough cash to make a major acquisition.

Yet it was only this year that this last most exciting development came through. The acquisition of Kansas City Southern by CP stock was made official in 2023, when the Surface Transportation Board (STB) in the United States approved the deal. This came after years of back and forth between CP stock and Canadian National Railway (TSX:CNR), with CP stock coming out on top.

Growth keeps on coming

In the last decade alone, shares of CP stock have grown 325%, as of writing. Yet the thing is, this is without the acquisition of Kansas City. And that is a huge win for investors. Despite trading at or near all-time highs, investors should seriously consider CP stock as a company that could reach millionaire status in the next decade.

CP stock is now the only railway that runs throughout North America, stretching from Canada to Mexico. It added several new revenue streams, diversifying the stock even further. Plus, it’s now in talks of creating a passenger line that again would stretch from out of the country all the way to Mexico. These are all new revenue streams on top of the newly added bunch.

So while it certainly was already a possibility to become a millionaire in the last decade, it’s quite possible investors could do so again. If you were to have made $1 million in the last decade from this stock, it would have meant purchasing $238,095.23 worth of shares a decade ago.

Now, what about today?

Looking ahead

If you’re an investor hoping to be a millionaire, we could see shares grow another 325% over the next decade as well. Especially with the addition of so many new rail lines. With that in mind, we can see how much investors would need to invest over the next decade.

The compound annual growth rate (CAGR) of CP stock over the last decade has been 14.9%. Taking this into consideration, we can assume that the stock will grow by that amount (if not more) over the next decade.

Even so, at this rate it would mean purchasing $250,214 worth of shares to see it grow by 325% in the next 10 years to $1 million. However, if you saw the same growth over 20 years, then it gets far easier.

If you were to purchase 810 shares and hold them for 20 years, this could turn those shares into over $1 million in 19 years. That would mean a purchase price of $85,050 today! Definitely worth the investment to hit millionaire status without adding another dime.