Against this backdrop, let’s take a closer look at two Canadian stocks that have the potential to generate annualized returns in excess of 10% over the long term and help investors get significantly closer to their retirement goals.
Dollarama
Dollarama (TSX:DOL) is a proven long-term compounder, delivering an impressive 700% return over the past decade, which translates into an annualized return of 23.1%. Backed by its superior direct-sourcing business model and highly efficient logistics network, the Montreal-based retailer can offer everyday consumer products at attractive prices, allowing it to generate strong sales regardless of broader economic conditions.
The company has consistently expanded its footprint, expanding its Canadian store network from 652 locations in 2011 to 1,684 stores in the most recently reported third quarter of fiscal 2026. In addition, Dollarama operates 401 stores in Australia, further diversifying its growth base. This steady store expansion and resilient demand have led to strong financial performance, with sales and net income growing 12.1% and 18.8% annually, respectively, since fiscal 2011, supporting the company’s long-term price growth.
Looking ahead, Dollarama continues to see significant growth trajectory. Management expects the number of Canadian stores to reach approximately 2,200 locations by the end of fiscal 2034. Given the company’s efficient capital deployment, rapid sales growth, short average payback periods and relatively low maintenance costs, this expansion should meaningfully support both revenue and earnings growth. Over the same period, Dollarama also plans to expand its Australian presence to 700 stores.
In addition to its core businesses, Dollarama owns a 60.1% stake in Dollarcity, which operates 683 stores in five Latin American countries. With Dollarcity targeting an expansion to 1,050 stores by fiscal year 2031 – and Dollarama entitled to increase its ownership stake to 70% by the end of next year – I expect Dollarcity’s contribution to Dollarama’s revenues to rise steadily in the coming years. Given its resilient business model, disciplined expansion strategy and strong long-term growth prospects, Dollarama remains well-positioned to deliver superior long-term returns, making it an excellent buy for patient investors.
Waste connections
Another Canadian stock that I believe has the potential to deliver exceptional long-term returns is Waste connections (TSX:WCN), a leading waste management services provider operating in the United States and Canada. The company focuses primarily on exclusive and secondary markets, where competition is limited, allowing it to maintain higher margins and more stable prices. In addition to steady organic growth, WCN has consistently grown through disciplined, value-add acquisitions, which have been a key driver of long-term financial performance.
Over the past five years, the company has completed more than 100 acquisitions, adding approximately $2.2 billion in annualized revenue. Supported by this growth strategy and strong operational execution, it has delivered returns of over 420% over the past decade, translating into an annualized return of 18.2%.
Looking ahead, WCN is well positioned to maintain its growth momentum. Backed by a strong balance sheet and healthy free cash flow, management plans to continue pursuing an active acquisition strategy. The company maintains a robust pipeline of private acquisition targets in the United States and Canada that could collectively contribute up to $5 billion in annual revenues. In addition to acquisitions, WCN uses advanced technologies to improve efficiency and profitability. The deployment of robotics and optical sorters in the recycling facilities, combined with lower voluntary employee turnover due to improved engagement and safety metrics, has supported continued margin expansion. The company also uses AI-driven tools to optimize commercial overage costs and strengthen pricing discipline.
Given its solid underlying businesses, disciplined capital allocation and many long-term growth drivers, I believe WCN offers an excellent long-term investment opportunity.
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