PRL:CC - Got $5000? 5 Stocks to Buy for Lasting Wealth
2024-03-29 16:40:00 ET
You don’t need a massive amount of cash to get started investing in Canadian stocks . In fact, $5,000 is a great starting point.
Investing in stocks has an attractive risk-reward paradigm. The most you can lose is your initial capital. On the other hand, the amount you can gain from investing in stocks is infinite.
If you pick stocks in great businesses, you can substantially multiply your capital (especially over long periods). By diversifying your holdings, you greatly reduce your downside as well. If you are wondering how to build a portfolio that creates lasting wealth , here’s five growth stocks to buy for $5,000.
A top Canadian lending platform
goeasy ( TSX:GSY ) has steadily been grabbing market share in the non-prime lending market across Canada. Its expansion has helped fuel 28% compounded annual earnings per share growth over the past 10 years.
goeasy stock has almost mimicked its earnings growth trajectory. It is has risen by a ~25% compounded annual rate.
The company continues to expand its lending platform across Canada. Likewise, its compilation of services and segments continues to expand. Despite its strong growth, it trades at a reasonable low-teens earnings multiple. It also pays a nice 2.9% dividend yield today.
An industrial stock with incredible returns
TerraVest Industries ( TSX:TVK ) might be an unlikely stock for the long-term. It operates a mix of industrial and energy-related businesses.
These are not exciting businesses and they are generally low growth. Yet, TerraVest has been able to acquire a mix of these business at cheap valuations and then juice strong cash flows out of them. It then takes that cash and deploys it into more smart acquisitions.
TVK stock is up 367% in the past five years and 971% in the past 10 years. If it can continue to deploy its capital wisely, this stock could provide further strong gains ahead.
An exceptional software stock
No conversation about lasting wealth would be possible without discussing Constellation Software ( TSX:CSU ). Its stock is up 226% in five years and 1,298% over the past 10 years.
It continues to defy the worriers and deliver exceptionally strong results. The market is always worried that it is running out of acquisition targets and then it goes and surpasses even the highest expectations.
Not only is Constellation a great acquirer of software businesses, but it is an extremely smart operator. This stock is quite pricey today, but it won’t be too pricey if it can keep achieving its same rate of success as that of recent years.
Big growth for this small-cap stock
If you are looking for a stock that is earlier in its growth trajectory, Propel Holdings ( TSX:PRL ) should be on your radar. This $525 million market cap company is only in the early innings of its growth plan.
Like goeasy, it provides non-prime loans in the U.S. and Canada. However, it uses a proprietary artificial intelligent underwriting platform that helps it efficiently write loans at minimized risk.
The company has been growing earnings per share by 35%-plus a year over the past few years. It also pays an attractive 2.85% dividend.
A turnaround for upside
Another up-and-coming stock is Sylogist ( TSX:SYZ ). Unlike the above stocks, its longer-term returns have not been totally stellar. However, this software business is in the middle of a smart turnaround.
Sylogist has a new CEO that is reinvigorating its operational, sales, and asset capacity. It has some very high-quality enterprise software specialized for the educational, municipal, and charitable niches.
The company is just hitting its stride taking share from other legacy software providers. It could provide strong long-term returns for patient investors.
The post Got $5,000? 5 Stocks to Buy for Lasting Wealth appeared first on The Motley Fool Canada .
Fool contributor Robin Brown has positions in Constellation Software, Goeasy, Propel, and TerraVest Industries. The Motley Fool has positions in and recommends Propel and Sylogist. The Motley Fool recommends Constellation Software and TerraVest Industries. The Motley Fool has a disclosure policy .
2024