Canada has an elite group of stocks that have taken modest investments and turned them into millions. These types of stocks are incredibly rare.
The wonderful thing is that even though they have grown substantially over the years, they can still deliver attractive upside for shareholders.
Here’s a list of three magnificent Canadian stocks that have outperformed and should continue to drive strong returns in the future.
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Constellation Software: The greatest Canadian stock?
The first and potentially greatest-of-all-time (GOAT) Canadian millionaire-maker is Constellation Software (TSX:CSU). There are very few stocks in North America that have delivered such exceptional returns in such little time.
Had you bought $10,000 worth of CSU stock 16 years ago (shortly after its initial public offering), it would be worth nearly $1.5 million today. In that time, its stock has earned a 14,846% total return (or a 36% average annual total return).
Constellation acquires vertical market software businesses around the world. These tend to be small, niche, boring software businesses that serve a specific industry or purpose. This is its bread-and-butter acquisition target.
However, the company has recently moved to acquire larger business carveouts. To that end, it has spun-out entities with specific geographic and industry focuses. All these moves could continue to propel strong cash flow growth and potential share growth.
After a 60% rise over the past year, its stock is pretty expensive today. The market has high expectations. Yet, if Constellation can continue to deploy capital at high rates of return, there could still be strong capital growth ahead.
goeasy: Still more runway ahead
Another stock that has likely made a few millionaires is goeasy (TSX:GSY). If you had put $50,000 into this stock 15 years ago, it would be worth around $950,000 today.
The company pays a nice dividend. If you had reinvested the dividends earned over that time, that $50,000 would be worth $1.3 million today. Its stock (with dividends reinvested) has delivered a 2,561% total return (or 24.3% average annual total return) since 2009.
goeasy has developed one of the largest non-prime lending platforms in Canada. The company has been expanding geographically and by product category. It is growing its car and recreational vehicle lending business.
Likewise, it has plans to expand into credit cards and other banking services. All these growth opportunities could continue to help the company grow by high-teen, mid-20 percentage rates for years ahead.
TFI International: An affordable Canadian stock with room to grow
Finally, TFI International (TSX:TFII) is a great millionaire-maker stock. If you had put $20,000 into TFI shares 15 years ago, it would be worth $896,000 today.
If you reinvested the dividends it paid over the 15 years, that investment would be worth $1.2 million. With dividends reinvested, its stock has delivered a 5,731% total return (or 31% average annual return) since 2009.
TFI has built out a trucking empire by acquiring good transport businesses and making them even better. It has made over 90 acquisitions since 2009. The transportation and logistics leader just announced a major platform acquisition in the U.S.
While the deal won’t be immediately accretive, it will provide plenty of opportunities to manage and deploy capital in the future. This is still a relatively cheap stock, so there is room for it to be a millionaire maker in the years ahead.
