3 Canadian Growth Stocks for Superior Returns
The record-high inflation, rising interest rates, and supply volatilities led investors to turn their back on growth stocks. Due to the selloff, growth stocks are looking like attractive long-term picks. Let’s delve deeper into three such Canadian growth companies that continue to grow fast while their stocks are trading cheap.
goeasy (TSX:GSY) provides leasing and lending services provider to subprime borrowers. Over the years, goeasy has scaled its operations, while its stock has handily outperformed the broader markets due to its stellar financial performances. Besides stock price appreciation, goeasy has raised its dividend at a CAGR of 34.5% over the past eight years, thus enhancing its shareholders’ returns.
Notably, goeasy has consistently delivered solid sales and earnings growth for about two decades. Further, management projects double-digit revenue growth over the next three years. The economic reopening, higher loan originations, increase in loan ticket size, new product launches, and channel expansion indicate that goeasy could easily achieve a double-digit growth target. Further, operating leverage and strong payment volumes will likely cushion its earnings and dividend payments.
goeasy stock has dropped more than 35% this year and reflects a significant discount from its peak. Overall, the recent pullback in its stock price, large subprime lending market, ongoing momentum in its business, and solid dividend growth make it an attractive investment and support my bullish outlook.
WELL Health (TSX:WELL) is an omnichannel digital healthcare company that continues to grow at a breakneck pace. Regardless of the concerns about a slowdown in growth amid economic reopening, WELL Health is on course to deliver stellar revenues in Q1 on the back of continued growth in its omnichannel patient visits.
The company stated that its omnichannel patient visits surged 62% year over year in Q1. Further, it also improved on a sequential basis, which is encouraging, as WELL Health reported strong growth in patient visits during the fourth quarter.
The ongoing momentum in its business is expected to sustain in 2022. Management remains upbeat and expects higher patient visits to drive its top line in 2022. Also, opportunistic acquisitions and strength in the U.S. business augur well for growth. Thanks to solid sales and a focus on productivity savings, WELL Health expects to deliver profitable growth in 2022, which is a positive signal.
While WELL Heath continues to impress with its financial performances, its stock is trading cheap due to the recent selling and provides an excellent entry point.
Nuvei (TSX:NVEI)(NASDAQ:NVEI) is another high-growth stock that has corrected quite a lot from its peak, yet the company continues to grow fast. Notably, the accelerated pace of digital shift and growing adoption of e-commerce provides a multi-year growth opportunity for Nuvei.
Nuvei expects the momentum in its business to sustain and projects more than 30% growth in volumes and revenue in the medium term. An increase in the new alternative payment methods, strength in the e-commerce segment, expansion into new geographic markets, and customer acquisitions will likely drive its growth.
Further, demand for cryptocurrencies, its entry into high-growth verticals, land-and-expand strategy, and acquisitions bode well for future growth.
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* Returns as of 4/14/22
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Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nuvei Corporation.
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