2 Canadian growth stocks I’d like to buy now and hold for at least the next three years

There may be a market correction in the new year, but that is not only to be expected in a particular year; it’s a normal, healthy thing that I think new investors should view as more of an annual sell-off (like a Black Friday in the stock market) than something to be avoided. While the corrections are worth taking advantage of the weakness, I don’t think long-term thinkers should wait for them if they have too much money to go to work.

Undoubtedly, there is an opportunity cost to having too much money in a savings account and earning next to nothing, just like putting money into the market after missing a 20%+ rise in the TSX index in just over ten months.

Either way, a nice middle ground where investors put some money into stocks today while leaving some money to buy in rainy days could be wise. The key is understanding opportunity costs (the toll of inflation on the money supply as markets continue to climb higher) and making an informed decision given the range of risks to be taken and the rewards to be enjoyed. In this piece we look at two proven growers that I would like to buy and keep for the next three years or more.

Of course, the longer you hold onto stocks the better, at least when it comes to growth stocks with solid long-term stories.

Dollarama

You don’t have to be high-tech AI or agents to perform exceptionally well. Just look at discount store stocks Dollarama (TSX:DOL), which has once again outperformed this year, up more than 36% this year thanks to a number of impressive quarters. Indeed, Dollarama is not just a dollar store chain; it’s so much more. The goods are priced to get the best bang for your buck amid inflation and economic concerns.

And with Bernstein recently praising Dollarama as the Canadian version of Costcoonly with a lower entry price for the stock and no membership fees, I’m inclined to view DOL’s stock as still having a big value and momentum boost come year-end. I think Bernstein is right to make comparisons to Costco and that, like Costco, there aren’t enough Dollarama stores to keep up with the seemingly insatiable appetite for a good deal.

Regardless of income, everyone could use a good deal, and I think Dollarama’s ability to offer such a deal, which can rival that of a Costco, is a source of its greatest strength. At just over 32 times its price-to-earnings (P/E) ratio, I consider DOL stock to be a fair price for a premium defensive growth icon.

Food Couche-Tard

Food Couche-Tard (TSX:ATD) is another Canadian retailer with a solid growth profile. Certainly, after a few lackluster years, many will no doubt be wondering whether the grocery chain behind Circle K can still be classified as a growth stock. No doubt, revenue growth has slowed, but once the company becomes more active in mergers and acquisitions again, growth will follow. It’s just a matter of when Couche-Tard will get its promising growth-by-acquisition jolt back.

If you’re willing to stick with it for at least three years, I think the timing of the next big deal matters less. No doubt, a lack of catalysts or deal making has created a great buying opportunity to get a better price for those with patience than those without.

When it comes to convenience retail, I sense a big food-driven twist coming. And the collaboration with Guy Fieri for intriguing ready-made meals is just the beginning. In short, Couche-Tard is misunderstood when it reaches a fork in the road. Revenue has struggled, but there are so many levers we can pull to reignite growth (and the share price). That is why it seems wise to stay invested.