11 Best Growth Stocks In Canada (May 2024)

Every investor wants their investment portfolios to grow larger.

Growth stocks have been a popular choice amongst Canadians in an attempt to achieve this goal.

See if the best growth stocks in Canada listed below are well suited for you.

Best Growth Stocks In Canada

  • Constellation Software (CSU.TO)
  • TerraVest Industries (TVK.TO)
  • Goeasy (GSY.TO)
  • TFI International (TFII.TO)
  • The Descartes Systems Group (DSG.TO)
  • WSP Global (WSP.TO)
  • Dollarama (DOL.TO)
  • Alimentation Couche-Tard (ATD.TO)
  • Franco-Nevada (FNV.TO)
  • Intact Financial (IFC.TO)
  • FirstService (FSV.TO)

1. Constellation Software

Constellation Logo
  • Ticker: CSU.TO
  • Forward Dividend Yield: 0.19%
  • Dividend Payout Ratio: 17.45%
  • Dividend Yield (12-Month Trailing): 0.11%
  • Upcoming Dividend Date: Jan 11, 2024
  • Market Cap: $76.35 Billion

Constellation is more than just one of the best growth stocks in Canada. It’s arguably one of the best growth stocks in North America, especially if you are evaluating its performance over the last decade.

Between Sep 2013 and Sep 2023, the stock grew by about 1,500%. For comparison, Apple grew by about 900% over that period.

Constellation is an acquisition-oriented company that owns hundreds of vertical market tech companies through six businesses that are currently in its portfolio. This massive portfolio expands over 100 countries and serves dozens of industries.

The company is financially rock solid. And though it’s aggressively overvalued, especially if you consider the price-to-book ratio of over 29, it should be taken in the context of the company’s consistent growth.

For most growth stocks that offer these numbers, the growth is a temporary fluke, or it becomes unsustainable after a decade. This is not the case with Constellation’s growth.

Despite this epic and exceptionally market-beating growth, the company boasts a beta below 1.

About 6.9% of the company is owned by insiders, which shows the confidence of internal stakeholders, and over 39% by institutions, which gives it adequate stability.

The only problem you may have when it comes to Constellation is the price tag.

Many people start investing with less money than it takes to buy a single share of Constellation, which is on its way to a $3,000 price tag ($2,800) at the time of writing this.

If you are working with limited capital and an expensive stock like Constellation looks too risky, you may consider its fractional shares.

2. TerraVest Industries

Terravest Industries Stock
  • Ticker: TVK.TO
  • Forward Dividend Yield: 1.28%
  • Dividend Payout Ratio: 19.00%
  • Dividend Yield (12-Month Trailing): 0.95%
  • Upcoming Dividend Date: Apr 10, 2024
  • Market Cap: $992.46 Million

TerraVest Industries is the only small-cap on this list, but it’s not a small growth stock that raked in the number to be counted among the best growth stocks in Canada by a fluke.

It has been growing consistently over the last decade, and between Sep 2013 and Sep 2023, it climbed up about 856%.

If you add dividends to the returns, the overall number goes well above 1,300%.

Over the same period, the company grew its revenue by about 600% and net income by well over ten times.

It has a stable beta of 0.58 (at the time of writing this), and even though it carries a decent amount of debt, it can be considered easily manageable by its current revenue numbers.

The company has been a major outlier in its sector – energy. It has grown even when the other classic energy stocks (even the safe pipelines one) were slumping.

One possible reason behind this positive dissociation is that it’s primarily a support company for the energy sector and not directly exposed to energy prices.

It also caters to the residential market and is emerging as a strong player in the home heating market.

TerraVest is a small company by market cap, but its financials and business model make it a safe and stable pick.

Its overvaluation might make it “bulkier” than most investors are comfortable with, but that’s a necessary evil, especially for growth stocks offering these returns. 

3. Goeasy

Goeasy Stock
  • Ticker: GSY.TO
  • Forward Dividend Yield: 3.28%
  • Dividend Payout Ratio: 34.53%
  • Dividend Yield (12-Month Trailing): 2.33%
  • Upcoming Dividend Date: Jan 12, 2024
  • Market Cap: $2.61 Billion

Goeasy is one of the largest alternative financial companies in Canada. It’s not a bank, but with 400 physical locations, over two decades of successful loan history, and hundreds of thousands of customers, it certainly mimics one.

It’s much larger and more rapidly growing compared to many credit unions in the country.

Goeasy’s business strengths are catering to borrowers who cannot reach out to conventional banks because of their weak credit scores and offering financial products (like lease-to-own) for items used in every household.

These strengths also translated to impressive financial growth, with revenues growing from $219 million in 2012 to over $1 billion in 2022 and net income from $14 million to $140 million.

However, the stock growth has been even more impressive. The stock returned over 780% through price appreciation between Sep 2013 and Sep 2023.

You should understand that despite these impressive numbers, Goeasy is an inconsistent grower who has been struggling with recovery for the last 14 months at least.

But there are three reasons it’s still on this list. The first is that its financial and other fundamental strengths are still the same.

Secondly, it’s quite attractively valued right now and trading way below its target price, both of which indicate ample room for growth.

The third reason is dividends, which may not seem impressive if you evaluate them from the perspective of its yield, but its dividend growth has been quite impressive, and the payouts are highly financially sustainable.

4. TFI International

TFI International Stock
  • Ticker: TFII.TO
  • Forward Dividend Yield: 1.04%
  • Dividend Payout Ratio: 18.33%
  • Dividend Yield (12-Month Trailing): 0.75%
  • Upcoming Dividend Date: Jan 15, 2024
  • Market Cap: $16.43 Billion

TFII International has become more than just Canada’s largest trucking company, though this is one of the company’s main selling points because there is a significant difference between TFI International and its next competitor.

It’s also emerging as one of the most prominent supply chain companies in the country, thanks mostly to its aggressive acquisition strategy.

It has been acquiring a range of businesses and has already developed a sizable network of operating companies that operate under the TFI International banner.

It has also become one of the best growth stocks in the country and one of the handful of stocks that experienced explosive post-pandemic growth, and it wasn’t followed by a correction.

The TFI Stock gained over 200% on its pre-pandemic peak in less than two years. This pushed its already impressive ten-year price returns (Sep 2013 to Sep 2023) to about 774%.

The current price “range” may become the new normal for the company, considering its valuation and the modest bullish momentum the stock is experiencing.

Another reason that endorses this notion is that its financials grew just as impressively over the last three years.

TFI International may seem like the growth stock that is close to running out of momentum, but experts are divided. According to some, it’s already trading above its high target price, while others believe it’s underpriced. You should also take into account its debt when making an investment choice.

However, the most significant factor to consider would be its financial performance over the next one or two years.

A significant slump (Even quarter over quarter) may sound the alarm for this stock.

5. The Descartes Systems Group

  • Ticker: DSG.TO
  • Forward Dividend Yield: N/A
  • Upcoming Dividend Date: May 24, 2024
  • Market Cap: $9.97 Billion

Descartes Systems is one of the few stocks from the tech sector that offers a powerful combination of growth and consistency, even though its numbers are nowhere near Constellation’s.

Between Sep 2013 and Sep 2023, the stock rose by over 700%, and since it doesn’t offer dividends (common in the tech sector), that’s all the returns investors got from this investment.

The financials are experiencing just as impressive a growth. Between 2014 and 2022, the revenues have jumped by about 300% and net income by about 500%.

Another impressive element of its finances is the debt, which is virtually non-existent.

The company has an adequate amount of cash/investments on hand, even though its financial history indicates no need for a financial moat.

From a business model perspective, Descartes may not seem diversified enough to many investors.

It does one thing, but it does it quite well – logistics. The company offers a comprehensive range of service and platform features associated with logistics, catering to a range of stakeholders in a supply chain.

Like most other tech companies, what you need to be worried about, Descartes is market-disrupting competitors.

It’s a powerful player in the global supply chain and logistics network, but an Artificial Intelligence (AI) – Powered alternative that can offer significant tangible improvements over Descartes’s platforms at a better cost point can significantly impact the company’s long-term viability.

6. WSP Global

WSP Global Stock
  • Ticker: WSP.TO
  • Forward Dividend Yield: 0.78%
  • Dividend Payout Ratio: 36.32%
  • Dividend Yield (12-Month Trailing): 0.75%
  • Upcoming Dividend Date: Jan 15, 2024
  • Market Cap: $24.54 Billion

WSP Global is one of the largest engineering firms in the world and the largest in Canada, offering a wide range of services to a global clientele.

Its most significant strength is the massive network of professionals it has access to. These are ironically also its largest financial overhead.

However, it may be a long time before certain human expertise, especially in the engineering and problem-solving domain, is made obsolete by AI and ML, so the business model may be safe.

Another layer of safety is the company’s focus on earth and environment-related projects that made up 28% of the mix in 2022.

With the world’s focus on sustainability, this business avenue may see enormous expansion and may significantly grow the portfolio of projects the company has access to.

This may help the company grow its already impressive growth numbers even further.

It returned about 650% in the last decade (Sep 2013 to Sep 2023) just through stock appreciation, and the growth hasn’t slowed down much in recent years.

One thing you have to understand about WSP Global is that it is an expensive business, and though its financials have been green for years, one bad year for its top line can change that.

But the good news is that there is relatively little chance of that happening.

Also, most market experts have projected an average price point much higher than the company is currently trading for, which reflects the market’s confidence in the company.

7. Dollarama

Dollarama Logo
  • Ticker: DOL.TO
  • Forward Dividend Yield: 0.28%
  • Dividend Payout Ratio: 8.16%
  • Dividend Yield (12-Month Trailing): 0.27%
  • Upcoming Dividend Date: Feb 02, 2024
  • Market Cap: $28.16 Billion

Dollarama’s business model is quite simple – low-cost direct sourcing, which allows the company to keep prices low and offer good value to its customers.

This has allowed the company to grow both operationally and financially at an amazing pace.

The company started with a single Quebec store in 1992, and now, about three decades later, there are about a thousand stores around the country.

Its financial growth has been just as impressive. Between 2013 and 2023 (fiscal years), the company grew its sales by over 2.6 times.

This is impressive but quite conservative compared to the stock’s growth over that period, which was quite close to 600% over that period.

The company’s growth projections are ambitious, to say the least, as it’s projecting about 2,000 locations by 2031.

But considering the recent revenue jumps and the company’s resilience against weak economic conditions, the company might achieve this milestone, though not easily.

Dollarama might not be a very exciting pick, especially if you consider the recent, more paced growth of the stock.

But if you value safety and consistency in the long-term over short-term explosive gains, Dollarama is more than attractive.

Its overvaluation is the only major negative when it comes to this growth stock.

8. Alimentation Couche-Tard

Alimentation Couche-Tard Stock
  • Ticker: ATD.TO
  • Forward Dividend Yield: 0.76%
  • Dividend Payout Ratio: 12.95%
  • Dividend Yield (12-Month Trailing): 0.55%
  • Upcoming Dividend Date: Dec 21, 2023
  • Market Cap: $77.70 Billion

Alimentation Couche-Tard is among the safest growth stocks you can invest in, and this safety mainly comes from its business model and impressive global presence.

It’s the second-largest convenience store chain (by multiple estimates) in the world, with over 14,400 locations in 24 countries.

There are three brands under the Alimentation banner, including the flagship brand bearing the company name, but it owes its compelling growth to the originally US-based Circle K brand that the company acquired in 2003.

Alimentation Couche-Tard is not an overly consistent grower, which means that buying it for short-term growth may require tracking its trends and momentum quite diligently.

But its long-term growth potential is quite impressive. The company grew its market value by about 580% in the last decade, and dividends, while paltry in comparison, pushed the returns number over 620%.

The company is financially rock solid, and its top and bottom lines have both been growing steadily over the years.

Its valuation numbers are quite mixed, but it’s hovering quite close to its fair valuation.

The debt may seem insignificant, but it should be evaluated in the context of the massive geographical presence of the company. 

Alimentation may not offer the same growth pace as some others on this list, but if you lean more toward financial and business model safety, it can be considered a good pick.

9. Franco-Nevada

Franco-Nevada
  • Ticker: FNV.TO
  • Forward Dividend Yield: 0.95%
  • Dividend Payout Ratio: 38.26%
  • Dividend Yield (12-Month Trailing): 0.91%
  • Upcoming Dividend Date: Mar 28, 2024
  • Market Cap: $27.79 Billion

Even though it’s counted among one of the largest gold royalty and streaming companies around the globe, gold currently makes less than 60% of its holdings portfolio.

Energy holdings and other precious metals represent a big chunk of its portfolio as well, which is good from an underlying asset diversification perspective.

Still, its heavy lean towards gold makes it a good investment as a hedge against weak markets.

What’s even better is that, unlike other gold stocks that perform well in weak markets but may not offer good returns when the market is bullish, it manages to perform well in both markets.

This has allowed the company to grow to decent proportions, and it grew its market value by over 300% in the last decade alone. Its dividends, as it is an established aristocrat, push the overall returns number even higher, but the capital appreciation potential is the chief attraction of the company.

Financially, it’s not just solid in its current form; with almost zero debt, over $1.7 billion in cash and investments, and a steady net income, the prospects look promising as well.

The reason is the nature of its portfolio. Only about a quarter of its assets are currently in the production stage.

The rest will come online at various times in the future, and if they outperform the current producers, the financials of the company may reach new heights.

There is relatively little risk if you are considering adding this company to your portfolio.

It may underperform in certain weak markets because, despite its business model and gold orientation, it’s not perfectly immune to negative market conditions.

But you should be good if you are holding it long-term.

10. Intact Financial

Intact Financial Stock
  • Ticker: IFC.TO
  • Forward Dividend Yield: 2.20%
  • Dividend Payout Ratio: 58.82%
  • Dividend Yield (12-Month Trailing): 2.05%
  • Upcoming Dividend Date: Dec 29, 2023
  • Market Cap: $37.17 Billion

From a growth perspective, insurance stocks in Canada are usually not very attractive, but Intact Financial is an exception.

Not only is it a leader in Canada’s Property and Casualty (P&C) insurance, but it’s also one of the best-growing insurance stocks in the country.

While it’s still the most dominant portion of its portfolio, Canada is not the only significant market the company caters to.

Through an acquisition, the company has acquired a significant piece of the P&C insurance market in the UK and Ireland.

The company has experienced exceptional financial growth in the last three years, with revenues jumping over 70% between 2020 and 2022.

The stock has been performing consistently well for over a decade and has grown by over 210% between Sep 2013 and Sep 2023.

Intact Financial is a low-volatility growth stock capable of offering consistent and finance-backed returns.

Its dividends are another strong reason to consider holding the company long-term in your portfolio.

However, you should keep an eye on its organic growth. So far, the stock’s growth has been backed by comparable organic growth, and if that stops lagging, it may reflect in the stock’s performance as well.

11. FirstService

FirstService Stock
  • Ticker: FSV.TO
  • Forward Dividend Yield: 0.59%
  • Dividend Payout Ratio: 28.50%
  • Dividend Yield (12-Month Trailing): 0.4%
  • Upcoming Dividend Date: Apr 05, 2024
  • Market Cap: $9.86 Billion

FirstService is a leader in a niche market – property management. It’s the largest property manager in North America and oversees thousands of communities and millions of individual housing units.

It also has a massive essential property services business that compliments its property management business.

The bulk of the company’s revenues come from the US, making it less reliant on Canada’s currently shaky housing market. The financials are another reason to be impressed with this stock.

Between 2017 and 2022, the revenues have almost doubled, and the growth has been very consistent year over year.

The stock’s growth has been just as impressive. From joining the TSX in June 2015 to Sep 2023, the stock has risen by over 500%.

The growth would have been consistent if it weren’t for the correction it experienced after COVID-19 ravaged the market, but the company quickly bounced back.

The only major flaw in FirstService, as a stock, would be its aggressive overvaluation, which stands out even for a growth stock.

However, you should understand that all of its other fundamentals, like its market presence and its financials, are solid and may sustain this powerful growth pace in the future as well.

Honourable Mentions

There are several other companies that you should look into for their growth histories, capital appreciation potential, business models, and financial fundamentals that offer reasonable surety of continuous growth.

  • Toromont Industries Stock
  • Franco Nevada Stock
  • Algonquin Power & Utilities Stock
  • Canadian National Railway Stock
  • Sun Life Financial Stock
  • Waste Connections
  • National Bank of Canada
  • Lightspeed
  • Colliers International Group
  • Enghouse Systems
  • Parkland
  • FirstService
  • Metro
  • Nuvei

How To Buy Stocks In Canada

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To learn more, check out my full breakdown of the best trading platforms in Canada here.

Conclusion

Best Growth Stocks In Canada

These best growth stocks in Canada can essentially be bought anytime and, if kept for long enough, might yield promising returns.

However, the best time to buy would be market crashes, corrections, or sector-wide dips. When bought at a discount, the return potential will get a boost, and you may also get a better valuation deal.

If you want to augment portfolio growth with dividends for a different kind of return potential, these dividends stocks might be worth looking into.

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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