Despite the recovery in equity markets this month, concerns over geopolitical tensions, higher interest rates, and inflation persist. So, expect the equity markets to remain volatile in the near term. However, adding the following three reliable stocks to your portfolio could mitigate some of these market risks, thus strengthening your portfolio.
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Dollarama
Dollarama (TSX:DOL) is one of the reliable stocks to have in your portfolio due to its consistent performance and healthy growth prospects. The Montreal-based retail company has adopted a direct sourcing method which, along with efficient logistics, is able to deliver a wide range of products at attractive prices. Amid its attractive pricing, the company has delivered healthy same-store sales even during challenging macro environments, thus growing its financials and stock price. Meanwhile, the company has delivered over 715% returns in the last 10 years at an annualized rate of 23.4%.
Further, Dollarama is expanding its store network and expects to add around 450 stores over the next seven fiscal years to increase its store count to 2,000 by fiscal 2031. Given its capital-efficient growth model, quick sales ramp-up, and an average payback period of less than two years, I believe the expansion could boost its financials in the coming quarters. Further, the company’s subsidiary, Dollarcity, where Dollarama holds a 50.1% stake, is expanding its footprint across Latin America. The expansion could boost Dollarcity’s financials, thus increasing its contribution to Dollarama. Considering all these factors, I believe Dollarama’s growth prospects look healthy.
Waste Connections
Another reliable stock to add to your portfolio is Waste Connections (TSX:WCN), which collects, transfers, and disposes of non-hazardous solid waste. It operates primarily in secondary and exclusive markets, thus facing lesser competition and enjoying healthy operating margins. Amid its strategic acquisitions, the company has expanded its presence across the United States and Canada.
Year to date, WCN has completed several acquisitions, which will contribute US$375 million to its annualized revenue. Along with acquisitions, the company also focuses on organic growth and is developing multiple renewable gas or RNG (renewable natural gas) facilities. The company expects three of these facilities to become operational this year. Meanwhile, management expects an incremental $200 million contribution to its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) from 2026. So, its outlook looks healthy.
Besides, WCN has rewarded its shareholders by raising its dividends at an annualized rate of 14.3% since 2010. So, I believe WCN would be an ideal buy in this volatile environment.
goeasy
goeasy (TSX:GSY) would be my final pick, given its solid historical performance and healthy growth prospects. Over the last five years, the company has grown its revenue and diluted EPS (earnings per share) at a CAGR (compound annual growth rate) of 20% and 32.2%, respectively. Despite solid growth over the last few years, it has acquired just 2% of the Canadian $218 billion subprime credit market.
Meanwhile, goeasy is launching new products, expanding its delivery channels, and strengthening its digital infrastructure to expand its market share. Besides, tightening its credit tolerance by increasing required credit criteria and credit adjustments across the product suite has lowered its risks. Meanwhile, goeasy’s management expects its topline to grow in double digits for the next three years while its operating margins could expand from 38.1% to 41%.
Further, the company has raised its dividends at an annualized rate of around 30% since 2014 and trades at 10.7 times analysts projected sales for the next four quarters. Considering all these factors, I believe goeasy will deliver superior returns in the coming years.
