3 Canadian Stocks Poised for Big Returns Over the Next 10 Years

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Written by Rajiv Nanjapla at The Motley Fool Canada

Long-term investing is a strategy whereby an investor acquires and holds onto a stock or an asset for over three years. This strategy allows you to benefit from the power of compounding while shielding against short-term volatility. Additionally, it is less time-consuming and incurs lower transaction expenses. However, investors should exercise caution when selecting stocks. They should invest in stocks with solid underlying businesses and healthy long-term growth potential. Against this backdrop, let’s look at my three top long-term bets.

My first pick would be Celestica (TSX:CLS), which reported impressive second-quarter performance yesterday, beating its guidance. Its topline came in at $2.9 billion, representing a 21% increase from its previous year’s quarter, driven by growth across both its segments. The strong performance from its Connectivity & Cloud Solution (CCS) segment, with revenue of $2.1 billion – a 28% increase from its previous year’s quarter, drove its topline. The Hardware Platform Solutions, part of the CCS segment, rose its revenue 82% year-over-year to $1.2 billion during the quarter. Meanwhile, the revenue from its other segment, Advanced Technology Solutions (ATS), grew 7% to $0.82 billion.

Supported by its topline growth, expansion of its adjusted operating margin from 6.3% to 7.4%, and decline in sharecount due to repurchases over the last four quarters, the company’s adjusted EPS (earnings per share) stood at $1.39, representing a 54.4% year-over-year increase. Amid its impressive second-quarter performance and growing demand from its CCS customers, Celestica’s management has raised its 2025 revenue and adjusted EPS guidance. Moreover, the growing investments in expanding data centres to support the increased adoption of artificial intelligence (AI) have created long-term growth potential for its products and services. Further, Celestica trades at an attractive NTM (next 12 months) price-to-sales multiple of 1.7, making it an excellent buy.

Second on my list would be Shopify (TSX:SHOP), which provides internet infrastructure for small and medium-scale enterprises (SMEs) to conduct and expand their businesses. The ongoing trade conflicts and imposition of tariffs have created challenges for SMEs. Meanwhile, Shopify has launched new features, such as product filtering by country, duty calculation, and shipping management, to help SMEs conduct their cross-border trade.

Further, Shopify is focusing on expanding its payments platform, which it offered in 39 countries by the end of the first quarter. The improved platform will help the company to streamline onboarding processes, enhance security, boost conversion rates, and lower fees. The company has also launched multicurrency payouts in 20 European countries, allowing merchants to accept payments in different currencies.

Moreover, Shopify is investing in AI to develop innovative products and services to enhance the user experience, improve production capabilities, and drive operational efficiencies. The company recently acquired Vantage Discovery to strengthen its AI-powered search features. Additionally, the increased adoption of the omnichannel selling model has created long-term growth potential for Shopify, thereby making it an enticing long-term buy.

Dollarama (TSX:DOL) offers a wide range of consumer products at attractive price points through its superior direct-sourcing business model and efficient logistics. Therefore, the discount retailer enjoys healthy same-store sales even during a challenging environment. Meanwhile, the company plans to add over 560 stores over the next eight years, raising its store count to 2,200 by the end of fiscal 2034. Given its efficient capital model, quick sales ramp-up, lower average payback period, and minimum store network maintenance capex requirements, these expansions could drive both its top and bottom lines.

Moreover, last week, Dollarama completed the acquisition of The Reject Shop, which operates 390 discount stores in Australia, marking the company’s entry into the Australian market. Additionally, Dollarama owns a 60.1% stake in Dollarcity, which operates 644 stores across Latin America and plans to increase its store count to 1,050 by the end of fiscal 2031. Considering all these factors, I believe the uptrend in Dollarama’s financials will continue and drive its stock price.

The post Long-Term Investing: 3 Canadian Stocks Poised for Big Returns Over the Next 10 Years appeared first on The Motley Fool Canada.

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Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.

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