What’s up guys, it’s wiz.
Welcome back to the channel. If you are new, I am a Canadian investor. I cover a whole lot of information about investing in Canada and do research into our Canadian market. I dive into growth investing, dividend investing and Canadian small caps / penny stocks. Today I will be going over 2 Canadian companies that have not always been at the forefront of the Canadian market in terms of volume, news, hype and such, but they have been slowly growing over time, becoming excellent wealth generators over the years. For new investors, you need to join Wealthsimple Trade if you are looking to start investing and live in Canada. If you use my link in the description to join Wealthsimple, you get 2 free stocks worth up to 4500$ so do not miss out.
To start off, we will be going over one of the best Canadian real estate stocks to buy that continues to get cheaper. Lately, the expectation of higher interest rates this year has been weighing on real estate stocks, which is creating significant opportunities. That’s why one of the best stocks to put on your buy list and watch over the next while is Canadian Apartment Properties REIT (ticker symbol CAR.UN). It is one of the most popular open-ended REITs in Canada. This Toronto-based company mainly focuses on managing its interests in multi-unit residential rental properties across Canada. It currently has a market cap of nearly 9.21 billion dollars. CAPREIT is already worth a buy today, as it trades at a new 52-week low and is very undervalued. However, with heavier market headwinds in the short term, it could potentially continue to trade lower. So, it’s a stock to have on your radar and watch closely, because it’s one of the best investments to own long term and the perfect growth stock for a TFSA. CAPREIT owns residential real estate assets all across Canada. It’s well diversified, highly defensive, and has a long track record of creating value and increasing the passive income it provides to investors. In the last couple of years, CAPREIT has faced several pandemic-related operational challenges that have hurt its business growth. This is one of the key reasons why its adjusted earnings fell by 28% YoY (year over year) in 2020 to around $5.39 per share. Despite continued challenges, it managed to report a 5.7% YoY increase in its total revenue in 2021 to around $933 million. Its overall portfolio occupancy rate improved to around 98.1% in 2021 from 97.5% in the previous year, showcasing a strong recovery. With the help of modest increases in average monthly rents, the company’s adjusted earnings for the year jumped by more than 48% YoY to $8 per share, crushing analysts’ consensus estimate of $5.81 per share by a huge margin. It also has a solid growth outlook. CAPREIT’s plans to “raise between $850 million and $900 million in total mortgage renewals and refinancings for 2022, excluding financings on acquisitions.” To accelerate its financial growth further in the coming years, it continues to focus on new quality acquisitions. In line with this strategy, CAPREIT made total acquisitions worth $805 million in Canada and $249 million in the Netherlands last year. Its balance sheet gives it the flexibility to continue expanding its business through such quality acquisitions, boosting its long-term growth outlook. If you’re looking for the best Canadian stocks to buy for your portfolio, CAPREIT is one to keep an eye on while it’s undervalued.
The second pick I have for you guys is another Canadian stock that I always enjoy talking about, it is Dollarama (ticker symbol DOL). Dollarama boasts a resilient business model and is excellent for risk-averse value investors. The impressive operational and fiscal results of this $21.96 billion company in fiscal 2022 reflects in the stock’s performance. At close to 74$ per share, current investors enjoy an 18.56% year-to-date gain on top of the modest 0.27% dividend. In the year ended January 30, 2022, sales, EBITDA, and operating income increased 7.6%, 13.4%, and 14.4%, respectively, versus fiscal 2021. According to management, Dollarama is well positioned to pursue its profitable growth. Dollarama is highly defensive, but over the long run, it’s another incredible growth stock. Consumers have been trying to stretch their dollars for years. Naturally, retailers like Dollarama have seen incredible long-term growth in their business’ operations. And in the current environment, Dollarama continues to have the potential to see the demand for its products rise, as consumers look to offset the impacts of high inflation. Furthermore, Dollarama stock now offers higher-quality goods besides its cheap stuff. This allows every type of consumer to head to Dollarama for their purchases. It’s no wonder the company is able to keep opening stores and see revenue rising. In fact, same-store sales rose 1.7% year over year, with traffic up 4%, as strong demand continues. Furthermore, EBITDA was up 13.4% to $1.28 billion, which helped the company raise its dividend by 10% compared to other growth stocks.
CAPREIT and Dollarama are undervalued when overlooking their business growth potential. The stocks are likely to multiply in value in the medium term, and, therefore, the current share prices are good entry points. More importantly, there are recurring income streams from the dividends that are paid out while waiting for that growth. Hope you guys enjoyed these 2 undervalued Canadian growth companies. Please watch my previous videos on Canadian stock recommendations and let me know of any Canadian stocks you want me to look into and give my opinion on. Let me know in the comments, since I really want to expand my knowledge in the Canadian market. If you did enjoy this video, leaving a like really helps grow the channel! Thanks for watching, I’ll see you guys in the next video!