CSU:CC - 2 Stocks With Millionaire-Maker Potential
2024-03-13 10:30:00 ET
Millionaire-maker potential is a relatively vague term in the absence of other important variables like the amount of capital you are starting with and the number of years you will hold the so-called millionaire-maker stock.
However, if we set reasonable quantities for both, say $50,000 to $100,000 in capital and 10 to 20 years of the holding period, the pool of stocks with millionaire-maker potential shrinks quite a bit.
A tech stock
When you are looking for powerful growth, tech stocks are an easy pick in North America, but even though many of them offer powerful growth, they are not always consistent.
However, one stock that offers the best of both worlds is Constellation Software ( TSX:CSU ). This software holding company has six major software businesses under its umbrella, which, in turn, have a wide range of software businesses, mostly catering to individual vertical markets.
As a result, Constellation has a massive reach — over a hundred countries and the client portfolio exceeds 125,000. A massive chunk of the stock is held by institutional investors, which lends adequate stability to the stock. It’s also a consistent dividend payer with a solid history and a small yield, but the most impressive feature of this stock is its compelling growth.
It returned nearly 280% in the last five years, and while it’s a far cry from its last 10 year’s returns of 1,350%, it’s still an impressive growth rate. Considering its consistent growth history, the stock may make you a millionaire if you start with a solid capital amount and it keeps growing at its current or a more compelling rate.
One weakness of this stock is its incredibly bloated valuation. It hasn’t prevented its growth till now, but it’s still a risk factor you should take into account.
A financial stock
goeasy ( TSX:GSY ) is one of the largest alternative lenders in the country. It has too large a footprint for an alternative financial company, and its 400 locations are comparable to larger regional banks or credit bureaus. Over the years, it has expanded its business model, and while small personal loans were not part of the original business model, they are now the focal point of this business.
From a performance perspective, goeasy has been one of the most rewarding stocks on the TSX. It returned over 970% to its investors via capital appreciation and dividends. The growth has slowed down, and the last five year’s returns were around 310%, but that also includes a massive dip that the stock still hasn’t recovered from.
The current bull market /recovery phase of the stock is reason enough to add this to your portfolio, but there are other positives as well. This includes its 26% discount, attractive valuation, and 2.9% dividend yield.
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Foolish takeaway
The two stocks have the potential to make you a millionaire in one to two decades, assuming you start with a sizable capital amount and the stocks maintain their historical returns. The risk of these or any other stocks straying from the bullish path gets higher as the holding period gets longer, but their histories and stable business model may augment their performance consistency.
The post 2 Stocks With Millionaire-Maker Potential appeared first on The Motley Fool Canada .
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy .
2024