The TSX-listed Canadian stocks we’ve discovered have had average annualized revenue growth of 42.5% over the past three years and net income growth of 51.6% per year over the past two years
SmallCapPower | March 8, 2021: Revenue and earnings per share (EPS) growth becomes a mechanism for companies to attract investors, acquire top talent, new technologies, additional product lines, or other companies, which leads to expansion, and even more growth for the business – a virtuous cycle. While revenue growth is one important aspect of a successful business, net-income growth gives investors a good snapshot of how efficiently companies can manage their operations and turn their revenue into profits, creating shareholder value. Typically, stocks with the greatest increases in share price have high revenue as well as net-income growth rates. Today we’ve identified four TSX-listed Canadian stocks that have seen double-digit revenue and net-income growth. This has resulted in double-digit and even triple-digit investment returns over the past three years.
*Share price data and other metrics as of March 5, 2021
AcuityAds Holdings Inc. (TSX:AT) – $19.82
AcuityAds is a Canadian tech company operating in the marketing vertical of the AdTech industry that provides marketers a solution for digital advertising. It operates an advertising platform that brings programmatic and automated capabilities using proprietary machine learning and artificial intelligence technology. The Company offers targeted ads, identifying consumers based on their shopping intent and delivering ads more likely to appeal to them. AT also operates a self-service platform called illumin. AcuityAds has achieved impressive sales growth of 21.5% per year over the past three years and an even more impressive 95.7% per year for each of the last two years. As a result of the COVID-19 pandemic we expect AT’s revenue continue to grow as consumers shift to buying more goods online, driving purchases of programmatic ads from retailers.
- Market Cap: $1060.7M
- YTD-Return: +38.7%
- 3-Year Return: +1,315.7%
- 30-Day Average Trading Volume: 1,043,770
- 3-Year Revenue Growth: +21.5%
- 2-Years EPS Growth: +95.7%
Ero Copper Corp. (TSX:ERO) – $21.16
Ero Copper is a base metals producer focused on its Vale do Curaçá Property, located in Bahia, Brazil, which has been in production for 39 years. The Company mines copper from four mines on the property: the Pilar underground mine, the Surubim open pit mine, the R22W open pit mine, and the Vermelhos underground mine. Ero Copper also owns the Boa Esperanҫa development project, an IOCG-type copper project located in Pará, Brazil, and the NX Gold Mine, an operating gold and silver mine located in Mato Grosso, Brazil. Canaccord views the Company’s recent announcement of the discovery of one or more nickel-copper “Super-pods” samples at Vermelhos, which are returning copper grades between 4.96% and 3.49% at 51.8m and grades between 2.37% and 1.95% at 26.1m, as a catalyst for a takeover. These copper “Super-Pods” are returning much higher grades, compared with the world average of 0.6% copper per tonne of ore. We expect Ero Copper to continue to benefit from the expected increased copper demand coming out of China in 2021.
- Market Cap: $1,864.2M
- YTD-Return: +3.6%
- 3-Year Return: +161.2%
- 30-Day Average Trading Volume: 249,160
- 3-Year Revenue Growth: +58.4%
- 2-Years EPS Growth: +32.3%
Wesdome Gold Mines Ltd. (TSX:WDO) – $8.21
Wesdome Gold Mines explores for, extracts, processes, reclaims, and sells gold in Canada. It principally produces gold in the form of doré bars, and silver as a by-product. WDO boasts over 30 years of continuous gold production and the Company’s principal assets include the Eagle River Mine, which consists of three contiguous mining leases and 442 contiguous active mining claims covering an area of 7,958 hectares; the Mishi Mine that consists of 19 patented mining claims, five mining leases, and five staked claims covering an area of 3,055 hectares; and the Eagle River Mill located near Wawa.
- Market Cap: $1,144.6M
- YTD-Return: -22.7%
- 3-Year Return: +361.2%
- 30-Day Average Trading Volume: 446,850
- 3-Year Revenue Growth: +34.4%
- 2-Years EPS Growth: +54.4%
Park Lawn Corporation (TSX:PLC) – $30.96
Park Lawn is the only Canadian, publicly-listed deathcare company. It offers cemetery, cremation and funeral services in five Canadian provinces (Ontario, Quebec, Manitoba, Saskatchewan, and British Columbia) and 10 U.S. states (Michigan, Kentucky, Texas, Illinois, New York, New Jersey, Kansas, Missouri, New Mexico, and Mississippi). Park Lawn has been swiftly consolidating the deathcare industry. In 2016, the Company had ~90 funeral homes/cemeteries, and as of August 2020, Park Lawn has acquired an additional ~140 new assets. The deathcare industry is highly fragmented, with no one company having more than a ~15% market share, and as such there is ample opportunity for Park Lawn to conduct further M&A. With the Baby Boomer generation only getting older it is likely that the funeral business will continue to thrive even amongst a market downturn.
- Market Cap: $900.9M
- YTD-Return: +10.8%
- 3-Year Return: +20.6%
- 30-Day Average Trading Volume: 72,160
- 3-Year Revenue Growth: +55.0%
- 2-Years EPS Growth: +24.0%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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