AUS
NZ
UK
CA
USA
IND
Investors seeking significant returns and an accelerated path to retirement may find opportunities by strategically selecting individual stocks. While index investing provides exposure to the broader market, investing in high-quality companies with strong growth potential can yield outsized gains. Here are three TSX technology stocks that could contribute to a wealthier retirement:
1. GFL Environmental (TSX:GFL)
With a market cap of $14.5 billion, GFL Environmental operates in a recession-resistant industry, offering services such as solid waste management, liquid waste management, and soil remediation in Canada and the U.S. Despite economic challenges, TSX GFL demonstrated robust performance in Q3, with a 10.3% YoY revenue increase, driven by an 8.8% rise in solid waste core pricing.
GFL's margin improvement in Q3, evident in the 250 basis points YoY increase in adjusted EBITDA margin, reflects the company's operational strength. The divestiture of non-core assets allowed GFL to reinvest in higher-margin initiatives like RNG projects and new contracts. In a high-interest-rate environment, GFL managed to reduce borrowing costs by 60 basis points. Trading at 31 times forward earnings, GFL stock is discounted by 25% compared to consensus target estimates.
2. Equitable Group (TSX:EQB)
Undervalued in the banking sector, Equitable Group (EQB) is an attractive addition to a retirement-focused equity portfolio in 2023. Currently trading 14% below its all-time highs, EQB provides an annual dividend of $1.52 per share, resulting in a yield exceeding 2%.
EQB reported record earnings in the June quarter, attributed to its acquisition of Concentra Bank, portfolio growth, margin expansion, increased non-interest revenue, and operational efficiency. Priced at less than seven times forward earnings, TSX EQB is deemed inexpensive, especially considering the anticipated 19.5% annual growth in adjusted earnings over the next five years. Analysts are optimistic, predicting a surge of over 35% based on consensus price target estimates.
In conclusion, strategically choosing stocks with strong growth potential can significantly impact retirement savings. GFL Environmental and Equitable Group, with their respective strengths in waste management and banking, showcase promising opportunities for investors seeking outsized returns. Additionally, exploring a third stock can provide further diversification and potential for wealth accumulation. As always, investors should conduct thorough research and consider consulting with financial professionals before making investment decisions.
