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Investing in Canadian growth stocks with $2,000 can be an exciting opportunity, especially when focusing on mid-cap companies with strong potential. Among the many options on the TSX, BRP (TSX:DOO), Descartes Systems Group (TSX:DSG), and Hydro One (TSX:H) stand out as compelling choices. These three growth stocks provide a mix of innovation, stability, and long-term upside, making them excellent candidates for a well-balanced portfolio.
BRP
BRP, the company behind Ski-Doos, Sea-Doos, and Can-Am off-road vehicles, has had a rough year. But that doesn’t mean it’s not a worthy investment. The stock has dropped significantly from its 52-week high of $102.46 and is now hovering around its low of $59.61. Recent earnings show a revenue decline of 25.6% year over year, primarily due to inventory reductions and increased sales incentives.
While these numbers might seem concerning, BRP is positioning itself for future growth through expansion into electric vehicles. The growth stock is also returning capital to shareholders with a 1.23% dividend yield, and with a payout ratio of just 23.64%, it has plenty of room to grow. Investors who believe in a rebound for the recreational vehicle market could see significant upside in the years to come.
Descartes
While BRP faces near-term challenges, Descartes Systems Group is thriving. As a logistics and supply chain software leader, Descartes has capitalized on the increasing complexity of global trade. Its most recent quarterly results showed a 14% increase in revenue year over year, bringing in $607.7 million. Profit margins are healthy at 21.03%, and earnings growth came in at 23.4%, reinforcing the growth stock’s strong positioning in the industry.
Unlike companies that struggle with cyclical demand, Descartes benefits from a subscription-based model that ensures stable revenue. With almost no debt and a strong cash position of $252.65 million, the growth stock has plenty of flexibility for future acquisitions and growth initiatives. Though its stock isn’t cheap, trading at a price-to-earnings ratio of 77.42, its long-term potential justifies the premium valuation.
Hydro One
For investors looking for a safer play, Hydro One provides a reliable, steady-growth option. As Ontario’s largest electricity transmission and distribution company, it operates in an industry that remains essential regardless of economic cycles. In its most recent quarter, the company reported a net income of $371 million, up from $357 million in the same period last year.
Revenue grew by 13.3% year over year, reflecting Hydro One’s continued ability to generate stable cash flow. Earnings per share (EPS) came in at $0.62, a slight increase from $0.60 the previous year. Alongside consistent financial performance, Hydro One also offers a solid dividend yield of 2.76%, making it a strong choice for investors who value both growth and passive income.
Bottom line
Each of these growth stocks brings something different to the table. BRP is a turnaround play that could benefit from a rebound in discretionary spending and the company’s expansion into electric vehicles. Descartes offers high-margin growth through its logistics software solutions, providing a resilient revenue stream in a digital-first world. Hydro One delivers stability and dividends, making it a strong anchor for any portfolio. By investing in all three, investors gain exposure to different sectors while balancing risk and potential returns.
Looking ahead, each company has clear growth catalysts. BRP’s focus on electric recreational vehicles could open new revenue streams, especially as governments worldwide push for sustainable transportation. Descartes will continue to benefit from the digitalization of supply chains, ensuring its services remain in demand. Hydro One is set to grow as infrastructure investments and population increases drive higher electricity demand. These factors make all three stocks strong long-term bets for investors seeking growth and resilience.
While no investment is without risk, these three companies offer a combination of strong fundamentals and sector diversity. Investors looking to put $2,000 to work in Canadian stocks would be well-served by considering BRP, Descartes, and Hydro One. Whether looking for a high-risk, high-reward turnaround play, a premium growth stock in the logistics space, or a steady utility stock with a strong dividend, this portfolio mix provides a compelling blend of opportunity and stability.
