Stock market prices do take random paths each day. However, some Canadian stocks have mastered the art of sustained growth. Two standout performers have not just weathered market storms – they’ve thrived through them. Celestica Inc. (TSX:CLS) and Dollarama (TSX:DOL) didn’t just have a good past year; they’re riding multi-year waves of success that have transformed modest investments into substantial wealth, and they may retain the positive momentum in 2025.
Picture this: A $10,000 investment in Dollarama stock back in 2010 would now be worth nearly half a million dollars. Meanwhile, Celestica stock has turned the same investment into more than $130,000 in just five years. These aren’t just lucky breaks – they’re the result of robust business models meeting powerful market trends. Let’s take a closer look.
Celestica stock rides on AI growth momentum
Celestica stock has sustained positive growth momentum for half a decade. Shares gained 68% during the past six months, more than tripled in value during the past year, and delivered a stunning 1,200% gain over the past five years.
The tech industry’s supply chain partner had positioned itself perfectly in the artificial intelligence (AI) boom. Riding on strong demand for AI-related products, Celestica’s total revenue surged by 22% year-over-year during the third quarter of 2024 to US$2.5 billion, exceeding management’s earlier expectations. The business’s adjusted operating margin expanded by 100 basis points and adjusted earnings per share climbed 60% higher while operating cash flow improved by 64%.
Good times are rolling at Celestica and momentum should spill over into 2025.
Can Celestica stock sustain recent growth momentum?
Given the “unexpectedly” strong revenue growth momentum, the company increased its revenue guidance for 2024 to US$9.6 billion in October. Its sales guidance for US$10.4 billion for 2025 implies sustained revenue growth while its adjusted earnings outlook for this year suggests a potential 14.8% upsurge in profits. Actual results have been exceeding management’s expectations lately, adding to the market’s joy.
Adding to the momentum, Celestica’s management is showing confidence through share buybacks, with recent authorization to repurchase up to 10% of public shares through October 2025. Over the past five years, the company has reduced its share count by more than 10%, effectively boosting each remaining share’s claim on future earnings.
Shares currently trade at a forward price-to-earnings (P/E) multiple of 31, and look expensively priced given an industry average PE of 27. High quality blue-chips usually fetch premium valuations, especially when good momentum is going for them.
Dollarama stock: Discount retail champion sustains 10-year upside momentum
While tech stocks often grab headlines, Dollarama proves that sometimes the best investments come from simpler business models. With a straightforward strategy of selling merchandise under $5, this discount retail giant has delivered extraordinary returns to its stock investors – a 47.5% gain in the past year and an astounding 600% return over the last decade.
Can Dollarama stock keep growing your investment dollars?
What makes Dollarama particularly interesting for 2025 is its defensive nature. As Canada faces potential trade uncertainties with the United States, value-conscious consumers are likely to find Dollarama’s discount offerings increasingly appealing. The company’s expansion into South America through Dollarcity adds another growth dimension, with these outlets already outperforming their Canadian counterparts in revenue per square foot.
Dollarama’s profitable business model and its established moats combine with astute management teams to foster DOL stock forward, and the consumer defensive stock may sustain positive investment returns for long-term oriented investors for decades more.
Despite sustained positive momentum, Dollarama stock’s P/E ratio of 35 lies below an industry average of 37, and the shares appear fairly valued.
Investor takeaway
Celestica stock and Dollarama stock continue to offer compelling buy-and-hold cases for investors seeking Canadian stocks with proven track records and continuing momentum. While past performance doesn’t guarantee future returns, both blue-chip companies have demonstrated their ability to adapt and thrive in changing market conditions, making them worthy of consideration for long-term growth-oriented portfolios.
