Here are three of my top Canadian picks for investors looking for generational wealth and financial security over time.
Shopify
One of the best growth stocks Canada has to offer, Shopify (TSX:SHOP) is a world-class e-commerce leader delivering some of the most important technologies in the market today.
The company’s flagship e-commerce platform supports millions of businesses in their ability to operate efficient and profitable online stores. For investors who believe e-commerce will continue to dominate the retail landscape, Shopify remains my favorite way to play this sector.
Given the company’s recent revenue and earnings figures, investors are betting that growth will remain at current levels or pick up over time. I think that assessment is fair and justifies the company’s premium multiple. Of course, a lot will have to go right for Shopify to continue doubling over time, but in this case, I’m an optimist.
Kinaxis
Shares of Kinaxis (TSX:KXS) have traded within a relatively narrow range over the past five years and have actually fallen during this period. On its face, that’s not a bullish argument, although I think investors and the broader market are underestimating this company’s growth potential at their peril.
The supply chain software maker has integrated artificial intelligence into its product portfolio to accelerate growth. In recent quarters, the company has experienced solid growth, with the order book for its AI solutions increasing at an impressive rate.
Now, Kinaxis is one of those companies with a premium multiple, so some investors may think that much of the future growth coming from these integrations is already baked in. That’s fair and something to think about.
That said, if AI is as big as everyone claims, this is a top growth stock. I don’t think investors should lose any sleep over it now. With solid earnings and cash flow growth potential, I think any purchase price below the $150 level will prove very profitable in the long run.
Toronto Dominion Bank
The final growth stock pick on this list is a company that many investors may not consider as a growth strategy. That said, I believe that Toronto Dominion Bank (TSX:TD) could be one of the best options for investors looking for both capital growth and dividend income over time.
Yes, TD stock has a 3.3% dividend yield, and that’s a big part of the company’s investment thesis. However, the company’s growing retail footprint and ability to accelerate revenue and profit growth over time through technology and innovation set this major Canadian bank apart from its peers.
I think TD has one of the most robust balance sheets among its peers, along with one of the best growth profiles in this sector. Accordingly, the company’s premium multiple is justified as I expect margin expansion to continue over the course of the coming year. As the yield curve steepens, TD’s net interest income could get a big boost, and we could see this stock accelerate even further.
At least that’s my base case.
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