Written by Rajiv Nanjapla at The Motley Fool Canada
Over the last three days, global equity markets have been under pressure amid rising oil prices. Investors are worried that the rising oil prices could drive inflation, thus encouraging the central banks to raise their benchmark interest rates further. Amid these concerns, the S&P/TSX Composite Index has declined by over 2% in the last three days. Despite the rising volatility, investors can add the following three winning stocks to strengthen their portfolios.
Dollarama (TSX:DOL) is one of the top Canadian stocks to have in your portfolio. The discount retailer has grown its revenue and net earnings at a CAGR (compound annual growth rate) of 11.2% and 17.4%, respectively, since 2011. Supported by this strong performance, the company has delivered impressive returns of 1,647% over the last 12 years at an annualized growth rate of 26.9%. Meanwhile, the company has continued its uptrend by providing 10.8% returns this year.
Given its expansion plans, I expect the uptrend in Dollarama’s financials to continue despite the volatile market conditions. The company’s management expects to expand its store count to 2,000 by 2031. Besides, the company is improving its direct sourcing capabilities to provide higher customer value. Also, it enjoys a quick sales ramp-up and payback period of less than two years, resulting in lower capital intensity and higher return on investment in its store expansion.
Considering all these initiatives, I believe Dollarama would be an excellent addition to your portfolio, irrespective of the economic outlook.
Second on my list would be Waste Connections (TSX:WCN), the third-largest waste management company. Despite its aggressive acquisition strategy, the company enjoys higher EBITDA (earnings before interest, tax, depreciation, and amortization) margins due to its integrated business model and operations primarily in secondary or exclusive markets. Since 2011, the company has made over $13.5 billion worth of acquisitions, driving its financials and stock price.
Over the last 10 years, the waste management company has returned over 590% at a CAGR of 21.4%, outperforming the broader equity markets. Also, it trades over 6.4% higher for this year despite the volatile environment. Given the essential nature of its business, favourable rate revisions, and continued acquisitions, I expect the uptrend in the company’s financials to continue. It has also rewarded its shareholders by growing its dividends at an annualized rate of over 15% since 2010. So, I am bullish on Waste Connections despite the growing volatility.
My final pick would be goeasy (TSX:GSY), which has grown its revenue and adjusted EPS (earnings per share) at a CAGR of 17.7% and 29.5%, respectively, since 2012. Supported by these strong financials, the company has delivered over 1,400% returns for the last 10 years at a CAGR of 31.1%. Despite the strong performance, the company owns a small percentage of the $200 billion subprime credit market, thus providing excellent growth prospects.
Meanwhile, the sub-prime lender has improved its products, pricing, and cost structures to lessen the impact of the lowering of the maximum allowable interest rate to an annual percentage rate (APR) of 35% from 47%. Also, its expanding customer base, strategic initiatives, and stable credit and payment performances could continue to boost its financials in the coming quarters. Notbally, the company also pays a quarterly dividend of $0.96/share with its forward yield at 3.22%.
The post 3 Winning Stocks to Buy No Matter What the Market Is Doing appeared first on The Motley Fool Canada.
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