Considerations
The first thing to consider is scalability. Investors need Canadian stocks that can grow well beyond their current size without hitting natural limits. This often means that companies are active in large or growing markets. If you’re starting with $10,000, scalability is your ticket to growing your wealth because it gives your investment room to multiply instead of just growing incrementally.
Then look for profitability and reinvestment discipline. Canadian stocks that consistently generate strong free cash flow and reinvest it at high rates of return are the ones that compound most effectively. A company that earns 20% on reinvested capital doesn’t need massive revenue growth to multiply shareholder value. Instead, it must continue to multiply internally.
Another critical factor is competitive advantage, or what Warren Buffett calls a “moat.” It may involve a dominant brand, economies of scale, proprietary technology or a network effect that keeps customers loyal. Moats protect profits and make profit growth sustainable. A small business with an ever-expanding moat can deliver exponential returns as it scales. From there you need patience.
CJT
Cargo jet (TSX:CJT) is one of those rare Canadian stocks that combines a dominant market position, steady cash flow and huge long-term growth potential. Cargojet plays a crucial role in the country’s economy as the backbone of overnight air freight, providing time-sensitive deliveries for retailers, couriers and e-commerce giants such as Amazon. The Canadian stock operates in a niche with very high barriers to entry. The company essentially dominates Canada’s overnight air freight network, operating flights between 16 major cities and having long-term contracts with Canada Post, Purolator, UPS and DHL.
One of the biggest growth drivers for Cargojet is the rise of e-commerce. Canadians are ordering more online than ever before, and companies are demanding faster, more reliable delivery times. Any package that needs to be transported overnight relies on companies like Cargojet to make this possible. Even as the pandemic-induced boom has cooled, e-commerce remains structurally higher than before 2020, meaning air freight demand won’t disappear in the long term. Cargojet has adapted well to this new approach and has invested in fleet expansion, international routes and efficiency upgrades to respond to the trend.
Canadian stocks have been volatile in recent years, falling from their pandemic highs as demand normalized. But that pullback could be an opportunity for long-term investors. Cargojet now trades at just 8.9 times earnings and offers a dividend yield of 1.72%. Should the shares return to pandemic highs, that would be up 64% at the time of writing!
BAM
Brookfield Asset Management (TSX:BAM) is one of the most impressive long-term compounders in Canadian history. BAM has been one of the true engines of global wealth creation for decades. Canadian equities manage hundreds of billions of dollars in real assets, including infrastructure, renewable energy, real estate and private equity. BAM focuses on collecting stable management and performance fees, regardless of what happens in the broader economy.
BAM’s assets under management, now over $900 billion, continue to grow. That creates a self-reinforcing cycle of scale: more assets mean more fees, more profits, and more money to reinvest in expanding the business. This model produces consistent, inflation-protected cash flow with little capital risk.
Financially, BAM is a powerhouse. It pays a modest but growing dividend that currently yields 3.2%. Furthermore, it trades at just 38 times earnings. Over the past decade, Brookfield’s ecosystem of companies has delivered some of the strongest long-term returns on the TSX, and BAM represents the purest way to manage that growth story with less risk. Should the shares return to highs, that would be an easy 13% upside at the time of writing.
In short
From €10,000 to €100,000 does not have to be difficult or risky. Investors just need strong companies and patience. And when it comes to finding two Canadian stock stars, Cargojet and BAM belong on your watchlist.
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