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Investors feeling the pressure of a stock market sell-off should understand that a bear market lasts an average of 289 days. Historically, every bear market has been followed by a protracted bull run, allowing the most patient investors to build generational wealth over time.
Amid stock market volatility, you need to find a basket of quality growth and blue chip stocks and buy them at attractive valuations. Here are five such TSX stocks that can help you grow your stock portfolio to $1 million when a bull market returns.
Good health stock
A company active in the field of digital health, Well health (TSX:WELL) stock is valued at a market capitalization of $1.11 billion. Well Health grew revenue from $32.8 million in 2019 to $570 million in 2022, driven primarily by high-value acquisitions.
This rapid expansion in sales has allowed the company to improve profit margins as well. Analysts are forecasting adjusted earnings per share of $0.23 in 2024, compared to 2022’s breakeven net income.
Restaurant Brands International Stock
One of the most popular quick service restaurant chains in Canada, Restaurant Brands International (TSX:QSR), also offers investors a dividend yield of 3.5%. These payouts have increased every year since 2014.
QSR owns and operates multiple brands including Burger King, Tim Hortons, Popeyes Louisiana Kitchen and Firehouse Subs. Each of these companies grew revenue in 2022, allowing QSR to end the year with revenue of $1.7 billion, up 9.2% year over year.
Brookfield Infrastructure Partners stock
A diversified company Brookfield Infrastructure Partners (TSX:BIP.UN), has a broad portfolio of cash-generating assets across industries such as transportation, utilities, midstream, data center and more.
A steady stream of cash flows allows GDP stock to offer investors a forward yield of 4.7%, which is pretty tasty. TSX stock is currently trading at a discount of over 40% to widely estimated price targets.
Canadian Natural Resources stock
An energy giant in the TSX index, Canadian Natural Resources (TSX:CNQ) has already returned 1,800% of dividend-adjusted earnings to shareholders since March 2003. Despite being part of a cyclical industry, CNQ has increased dividends at a 23% annual rate over the past 23 years, which is pretty extraordinary.
Despite these stellar numbers, CNQ stock is trading at 8.4 times forward earnings, which is really cheap. Additionally, the dividend yield is quite palatable at 5%.
Constellation Software stock
The last TSX stock on my list is constellation software (TSX:CSU). Since its IPO in May 2006, CSU stock has returned a staggering 17,550% to shareholders. With a market capitalization of $50.5 billion, CSU is one of the largest technology stocks in Canada.
Over the years, the company has grown its revenue and profit margins by focusing on high-profit acquisitions. The target companies provide business customers with mission-critical software services, resulting in high customer retention rates and high switching costs.
The stupid snack
A $50,000 investment in each of these five stocks will help investors grow their portfolio value to $1 million over the next 10 years, at a 9.7% annualized return. If these stocks return an average of 22% annually, your portfolio will be worth $1 million in a little under seven years.
Canadian investors should identify similar companies that are fundamentally strong and build a robust portfolio of TSX stocks.
