Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

Although growth stock picks can be highly volatile, they can make good long-term investments. They may be well-known stars or quiet gems, but they do share one common attribute—they are growing at a higher-than-average rate within their industry, or within the market as a whole, and could keep growing for years or decades.

And keep in mind that we focus on growth stocks, which have a good long-term history and favourable prospects. We downplay momentum stocks that tend to attract many investors simply because they are moving faster than the market averages, but are liable to fall sharply when their momentum fades.

There’s room for growth stock investing in your portfolio, but make sure you follow our TSI Network three-part Successful Investor strategy for your overall portfolio:

Invest mainly in well-established companies;
Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; Utilities);
Downplay or avoid stocks in the broker/media limelight.

Make better stock picks when you read this FREE Special Report, Canadian Growth Stocks: WestJet Stock, RioCan Stock and More.

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Growth Stocks Library Archives

Growth Stocks

This apparel IPO comes with risks

You should remain wary of stocks that attract broker/media praise for their high-profile products or services and their business models. Here’s an example of a stock to avoid:

ALLBIRDS INC., $1.06, (Nasdaq symbol BIRD; TSINetwork Rating: Extra Risk) (allbirds.com; Shares o/s: 97.2 million; Market cap: $166.5 million; No dividends paid) is a global “lifestyle” brand that aims to make more sustainable footwear and apparel products without the use of synthetic petroleum-based fibres like polyester.

The San Francisco-based company launched its IPO and began trading on Nasdaq at $15 a share on November 3, 2021....

1 min read

Pat McKeough

Growth Stocks

MP signs distribution deal for growth

MP MATERIALS CORP., $27.73, is a buy. The company (New York symbol MP; TSINetwork Rating: Extra Risk) (www.mpmaterials.com; Shares outstanding: 177.6 million; Market cap: $5.2 billion; No dividends paid) is the owner and operator of the Mountain Pass mine....

1 min read

Pat McKeough

Growth Stocks

ADT’s partnerships help power its results

ADT keeps signing up new security customers at the same time it retains more and more of its existing ones. The company’s expanded services help drive that growth. Those products include Wi-Fi-enabled security cameras and automated home solutions. ADT’s outlook is even brighter because of its new smart-home partnership with Google parent Alphabet....

2 min read

Pat McKeough

Growth Stocks

Chipotle tests out a new low-cost concept

Chipotle continues to have success in its competitive fast-food market. And now, it’s looking ahead to new opportunities. That’s why it’s testing a new takeout and delivery concept. We think this just adds to the company’s already bright future. The stock is a buy.

CHIPOTLE MEXICAN GRILL, $1,590.87, is a buy. The stock (New York symbol CMG; TSINetwork Rating: Extra Risk) (www.chipotle.com; Shares outstanding: 27.6 million; Market cap: $43.9 billion; No dividends paid.) is launching a new restaurant spinoff this month called Farmesa that features “California-inspired” bowls....

1 min read

Pat McKeough

Growth Stocks

Ready for a rebound

SHOPIFY, $59.92, remains a buy. The company (Toronto symbol SHOP; TSINetwork Rating: Extra Risk) (www.shopify.ca; Shares o/s: 1.2 billion; Market cap: $76.5 billion; No dividends paid) reported 25.7% higher revenue in the three months ended December 31, 2022, rising to $1.74 billion from $1.38 billion a year earlier.

Even so, Shopify is now eliminating 1,000 jobs, or 10% of its global workforce....

1 min read

Pat McKeough

Growth Stocks

Corteva positions you for gains

Corteva shares offer investors a number of pluses: Not only is the company at the forefront of key agricultural trends, the stock is a spinoff. Over the years, we’ve found that spinoffs are about as close as you can get to a sure thing in investing. It’s one key reason why we think Corteva has further gains ahead for investors....

3 min read

Pat McKeough

Growth Stocks

Dividend hike a sign of confidence

RESTAURANT BRANDS INTERNATIONAL INC. $86 is a buy for aggressive investors. The company (Toronto symbol QSR, Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 450.9 million; Market cap: $38.8 billion; Price-to-sales ratio: 4.5; Dividend yield: 3.5%; TSINetwork Rating: Average; www.rbi.com) operates 30,722 fast-food outlets in over 100 countries: 19,789 Burger King, 5,600 Tim Hortons (coffee and donuts), 4,091 Popeyes Louisiana Kitchen (fried chicken) and 1,242 Firehouse Subs.

Overall sales in the quarter ended December 31, 2022, rose 9.2%, to $1.69 billion from $1.57 billion a year earlier (all amounts except share price and market cap in U.S....

1 min read

Pat McKeough

Growth Stocks

CAE remains your better choice

The easing of COVID-19 travel restrictions continues to benefit these two aerospace stocks. However, CAE’s exposure to both military and healthcare customers makes it a better pick than business jet maker Bombardier.

CAE INC. $31 is a buy. The company (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 317.9 million; Market cap: $9.9 billion; Price-to-sales ratio: 2.5; Dividend suspended in March 2020; TSINetwork Rating: Average; www.cae.com) is a leading maker of flight simulators for commercial and military aircraft....

2 min read

Pat McKeough

Growth Stocks

Lower costs will help Saputo adapt

Dairy producer Saputo unveiled an ambitious new strategy in 2021 that will cut its operating costs. It also continues to benefit as restaurants re-open on the lifting of COVID-19 lockdowns. However, the company remains vulnerable to increasingly popular alternative dairy products such as plant-based milks.

SAPUTO INC....

1 min read

Pat McKeough

Growth Stocks

Purchase should spur more growth

TELUS INTERNATIONAL (CDA) INC. $30 is a buy for aggressive investors. The company (Toronto symbol TIXT; Aggressive Growth Portfolio; Manufacturing sector; Shares outstanding: 266.6 million; Market cap: $8.0 billion; Price-to-sales ratio: 2.4; No dividend paid; TSINetwork Rating: Average; www.telusinternational.com) operates call centres on behalf of over 650 corporate clients in 30 countries....

1 min read

Pat McKeough

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Investors Association of Canada
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Subscriber since 1996. Inner Circle Member Since 2006
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Browse Premium Topics

Cannabis

Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.