Don't Miss AI's Third Wave
Stocks have historically generated higher returns in the long term than most other investment options. Thus, allocating a portion of your savings toward equities can help you create wealth over time. However, investors should consider shares of fundamentally strong companies with the potential to deliver durable revenue growth and generate sustainable earnings.
With this backdrop, look at five Canadian stocks you can confidently invest $500 in right now.
Dollarama
One could start investing in equity with low-risk and high-growth stock Dollarama (TSX:DOL). This retailer sells products at low and fixed price points, which drives traffic and makes it relatively immune to market downturns. While it owns a defensive business, its stock has appreciated over 200% in five years, reflecting a compound annual growth rate (CAGR) of nearly 24.6%. Additionally, it has consistently increased its dividend over the past decade.
Dollarama’s value pricing strategy, extensive domestic store network, increasing brand awareness, and direct sourcing will likely drive its top line and cushion its earnings. Moreover, its growing earnings base could continue to support its payouts.
goeasy
Next are shares of the subprime lender goeasy (TSX:GSY). This financial services giant delivered an attractive return of about 323%% in the last five years. Meanwhile, it increased its dividend for nine consecutive years. goeasy’s stellar returns are backed by its ability to consistently grow its revenue and earnings at a double-digit rate.
The momentum in goeasy’s business will likely sustain in the upcoming years. The company will benefit from the large subprime lending market, diversified revenue streams, omnichannel offerings, loan growth, and stable credit performance. Further, operating efficiency will cushion its bottom line and support future dividend payments.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) could be a solid addition to your portfolio. This convenience store operator runs a low-risk business and has consistently delivered impressive revenue and earnings. Thanks to its solid performance, Couche-Tard stock has delivered an average annualized return of more than 18% in the last five years.
The convenience store operator is well-positioned to continue to grow its earnings at a double-digit rate. Its large store base, expansion of private label offerings, distribution optimization, and operational efficiencies will drive its top and bottom line. Further, its accretive acquisitions will accelerate its growth. Couche-Tard is also known for consistently growing its dividend, which is likely to sustain in the coming years.
Lightspeed
Lightspeed (TSX:LSPD) stock has lost substantial value year to date. However, its fundamentals remain strong, with the tech company consistently delivering solid revenue growth and heading toward profitability. Lightspeed is poised to benefit from the increase in its customer base with high gross transaction value (GTV). These customers can adopt its multiple modules, driving its average revenue per user and lowering churn.
Further, the ongoing transition in the selling model towards omnichannel platforms and increased spending on tech advancements will continue to drive demand for Lightspeed’s offerings. Given the correction in its price, Lightspeed stock is trading extremely cheap, providing a solid investment opportunity.
WELL Health
Investors could consider WELL Health Technologies (TSX:WELL) stock. This digital healthcare company has been rapidly growing its revenues, thanks to the continued growth in its omnichannel patient visits despite economic reopening. Moreover, it is profitable. Further, the company is actively pursuing profitable growth strategies, driving its cash flows.
Thanks to its solid organic sales growth and strong balance sheet, WELL Health is well-positioned to focus on growth initiatives, which will likely drive its market share. Further, the company’s investments in artificial intelligence technology will help develop new products and support its financials.
