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Where to Invest $10,000

The Motley Fool ·  07/22 16:30
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Are you thinking about investing $10,000? The TSX has a range of fundamentally strong stock stocks that can drive long-term capital growth, provide steady passive income, or offer a mix of both. These Canadian stocks have the potential to help investors meet their financial objectives.

With this backdrop, here are the three TSX stocks to invest $10,000.

goeasy

goeasy (TSX:GSY) is a solid investment offering high growth, value, and solid dividend growth. This financial services company is famous for delivering above-average returns and outperforming the broader market index with its returns. For instance, its stock has grown at a compound annual growth rate (CAGR) of over 27% in the past decade, delivering overall capital gains of about 1,031%.

Besides solid capital gains, goeasy enhanced its shareholders' value through higher dividend payments. It has paid dividends for 20 years and consistently increased it in the last 10 years.

Looking ahead, the momentum in goeasyâs business will likely sustain and its top and bottom line could continue to increase at a double-digit rate. goeasy is well-positioned to capitalize on the large subprime lending market. Furthermore, goeasyâs solid credit underwriting capabilities and operating efficiency bode well for profitability.

goeasyâs leadership in the subprime lending space, large TAM (total addressable market), geographical expansion, omnichannel offerings, and wide product range will likely drive its loan originations and consumer loan portfolio. This, in turn, will drive its top line. Higher revenue, steady credit and payment performance, and cost-savings will boost its earnings, dividend growth, and share price. goeasy stock trades at the next 12-month (NTM) price-to-earnings multiple of 10.6, which looks attractive considering its high earnings growth rate and a yield of 2.5%.

Alimentation Couche-Tard

Investors could consider buying shares of Alimentation Couche-Tard (TSX:ATD). The company operates convenience stores, retails fuel, and offers electric vehicle (EV) charging. Thanks to its relatively resilient business model and ability to drive traffic, Couche-Tard consistently generates solid revenues and earnings.

For instance, ATDâs revenue and earnings have grown at a CAGR of 7.3% and 18.8% over the past decade. Moreover, it increased its dividend at a CAGR of 26.6% during the same period. Thanks to its impressive financials, Couche-Tard stock has grown at a CAGR of more than 19% in the past decade, delivering an overall capital gain of about 493%.

Alimentation Couche-Tardâs value pricing strategy, extensive store presence, expansion of private label products, and improving operational efficiencies will likely support its sales and earnings. In addition, its emphasis on strategic acquisitions will likely expand its store base, drive traffic, and accelerate its growth rate.

Celestica

Celestica (TSX:CLS) is another excellent stock to buy and hold for years. The company provides design, manufacturing, and supply chain solutions and is poised to benefit from its exposure to high-growth sectors, such as EVs and artificial intelligence (AI).

Shares of Celestica have rallied over 738% in three years, outperforming the broader markets by a significant margin. This has driven its valuation multiple higher. However, investors should note that Celesticaâs premium valuation is justified, considering its high growth rate.

The growing adoption and deployment of AI computing will likely drive demand for Celesticaâs offerings and support its growth. Moreover, the ongoing strength in the commercial aerospace submarkets is positive. The company is also likely to benefit from the reacceleration in EV demand and the ongoing shift towards EVs and smart energy.

The post Where to Invest $10,000 appeared first on The Motley Fool Canada.

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