Kalkine Media - Amidst the TSX nearing its pinnacle levels, the opportunity to discover exceptional TSX growth stocks emerges. The market, scaling new heights with an all-time TSX Composite Index peak of approximately 22,362 in April 2024, reflects buoyant sentiments. This surge is fueled by the optimism surrounding forthcoming interest rate adjustments and robust economic conditions, surpassing initial apprehensions. Despite a recent downturn, with the market currently 2.8% below its zenith, the overall sentiment remains largely sanguine. The anticipation of monetary policy relaxation by the central banks of the United States and Canada contributes to this positive outlook.
Delving deeper, venturing beyond the market's broader spectrum unveils the potential for substantial gains from individual growth stocks. The crux lies in identifying fundamentally robust growth stocks capable of delivering enduring returns. Here, we spotlight two such TSX growth stocks that merit close monitoring for potential investment opportunities amidst market fluctuations.
Constellation Software (TSX:CSU) (TSX:CSU)
Positioned as a formidable TSX growth stock, Constellation Software caters to the escalating demand for software solutions, particularly in the post-pandemic era. Headquartered in Toronto, this tech entity specializes in acquiring and managing premier software businesses serving diverse 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 surged by 27% YoY to US$8.4 billion last year, propelled by sustained organic growth and successful assimilation of strategic acquisitions. Notably, the company recorded a robust 22.4% YoY surge in adjusted annual earnings to US$63.50 per share. Furthermore, its commendable cash-generation prowess, evidenced by a 36% rise in free cash flow to US$1.16 billion, fortifies its capacity for strategic reinvestment to fuel future growth trajectories.
goeasy (TSX:GSY) (TSX:GSY)
Another noteworthy 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 witnessed an uptick of nearly 59% over the past six months and an impressive 262% over the last five years. In addition to its robust growth trajectory, goeasy offers an enticing 2.6% annualized dividend yield.
In 2023, goeasy recorded a record annual revenue of $1.3 billion, buoyed by the expansion of its loan originations and portfolio. Remarkably, the company has achieved positive same-store revenue growth for 55 consecutive quarters, underscoring its resilience even in challenging economic climates. The company's focus on clientele with weaker credit profiles or lower income brackets positions it favorably to weather adverse economic conditions, enabling it to sustain dividend payouts for two decades. Moreover, goeasy has consistently raised dividends for ten consecutive years, rendering it an attractive proposition for long-term income-oriented investors.