Kalkine Media – The TSX is nearing its peak levels, presenting an opportunity to discover exceptional TSX growth stocks. The market has reached new heights, with an all-time peak of approximately 22,362 in April 2024, reflecting optimistic sentiments. This surge is driven by the anticipation of upcoming interest rate adjustments and strong economic conditions, surpassing initial concerns. Despite a recent downturn, the market is currently 2.8% below its zenith, but overall sentiment remains positive. The expectation of monetary policy easing by the central banks of the United States and Canada further contributes to this optimistic outlook.
Looking beyond the broader market, there is potential for significant gains from individual growth stocks. It is crucial to identify fundamentally strong growth stocks capable of delivering lasting returns. Here, we highlight two TSX growth stocks worth monitoring for potential investment opportunities amidst market fluctuations.
1. Constellation Software (TSX:CSU)
Constellation Software is a leading TSX growth stock that caters to the increasing demand for software solutions, especially in the post-pandemic era. Headquartered in Toronto, this tech company specializes in acquiring and managing top-tier software businesses serving various industries globally. With a current market capitalization of $75.1 billion and a trading price of $3,544.28 per share, the stock has surged by approximately 29% over the past six months and an impressive 200% in the last five years.
Constellation Software’s revenue grew by 27% year-over-year to US$8.4 billion last year, driven by sustained organic growth and successful integration of strategic acquisitions. The company also reported a strong 22.4% year-over-year increase in adjusted annual earnings to US$63.50 per share. Additionally, its robust cash generation ability, demonstrated by a 36% rise in free cash flow to US$1.16 billion, strengthens its capacity for strategic reinvestment to fuel future growth.
2. goeasy (TSX:GSY)
Another notable TSX growth stock, goeasy, headquartered in Mississauga, specializes in providing alternative financial services to subprime borrowers across Canada. With a market capitalization of $3 billion and a trading price of $176.04 per share, the stock has seen a rise of nearly 59% over the past six months and an impressive 262% over the last five years. In addition to its strong growth trajectory, goeasy offers a compelling 2.6% annualized dividend yield.
In 2023, goeasy achieved a record annual revenue of $1.3 billion, driven by the expansion of its loan originations and portfolio. The company has maintained positive same-store revenue growth for 55 consecutive quarters, highlighting its resilience even in challenging economic environments. goeasy’s focus on clients with weaker credit profiles or lower income levels positions it well to withstand adverse economic conditions, enabling it to sustain dividend payments for two decades. Moreover, goeasy has consistently increased dividends for ten consecutive years, making it an attractive option for long-term income-oriented investors.