Equity investors should regularly allocate a portion of their savings to buy and hold quality stocks each month. For instance, if you invest $1,000 each month and can generate 12% annually on these investments, your portfolio value will surge to $1 million over two decades.
As it is impossible to time the equity markets, it makes sense to dollar-cost average your investments and benefit from the power of compounding.
So, if you have $1,000 to invest in September, here are two top TSX stocks you can buy right now.
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Alimentation-Couche Tard stock
Among the most popular TSX stocks, Alimentation-Couche Tard (TSX:ATD) has returned 652% to shareholders in the past 10 years and a staggering 5,560% since August 2003, easily outpacing the broader indices.
Valued at a market cap of $70 billion, ATD stock is a domestic giant. Despite its massive size, the company is well-positioned to keep outpacing the broader markets. It reported a net profit of $671 million in fiscal Q4 of 2023 (ended in April), up from $478 million in the year-ago period.
In the last six months, ATD has gained traction in the U.S., which is the world’s largest economy. ATD signed agreements to acquire 112 stores from Mapco Express and 65 car wash stores in addition to 45 retail locations from Big Red Stores.
It also signed a deal totaling $4.5 billion to purchase 2,193 retail outlets from TotalEnergies in Europe, which will be a key driver of top-line growth in the upcoming decade.
Priced at 18 times forward earnings, ATD stock is quite cheap and trades at a discount of 10% to consensus price target estimates. Its stable cash flows allow ATD to pay shareholders an annual dividend of $0.56 per share, translating to a yield of 0.71%. While its yield is not too high, the company has increased payouts by 24% annually in the last nine years.
Dollarama stock
Similar to ATD stock, Dollarama (TSX:DOL) has also created significant wealth for long-term shareholders, rising 2,700% since its IPO in 2009. A Canada-based value retailer, Dollarama is fairly recession-resistant as it increased sales by 21% to $1.3 billion in fiscal Q1 of 2024 (ended in April.
Despite a sluggish macro environment, its comparable store sales were up 17% in Q1, significantly higher than the 7.3% growth experienced in the year-ago period. Its EBITDA (earnings before interest, tax, depreciation, and amortization) also rose 22% to $366.3 million, accounting for 28.3% of sales.
Dollarama continues to expand aggressively and opened 21 net new stores in Q1, compared to 10 stores in the year-ago quarter. It forecasts to increase its store count to 2,000 by 2031, making it one of the top TSX growth stocks.
Analysts tracking Dollarama stock expect sales to rise by 12% to $5.7 billion, while adjusted earnings might grow 15.6% in fiscal 2024. Priced at 27 times forward earnings, Dollarama trades at a premium, but quality growth stocks command a higher multiple for a reason.
Dollarama pays shareholders an annual dividend of $0.284 per share, indicating a yield of just 0.33%. But these payouts have risen by 12% annually in the last 12 years.
