Equity markets have long been a powerful vehicle for building and preserving wealth across generations, and long-term compounding can help investments grow substantially. A disciplined, long-term approach can also help investors look beyond short-term market volatility and reduce the need for frequent portfolio adjustments, making wealth creation less time-intensive.
However, successful long-term investing ultimately depends on the quality of the businesses selected. Investors should focus on financially sound companies with resilient business models, dependable cash flows, and compelling avenues for sustainable growth. Against this backdrop, let’s examine three Canadian stocks that could serve as strong foundations for long-term wealth creation.
Dollarama
Dollarama (TSX: DOL) operates a well-established discount retail business, with 1,734 stores across Canada and another 414 in Australia. Its efficient direct-sourcing model, disciplined cost structure, and optimized logistics enable the company to offer a broad range of everyday products at compelling price points. This value proposition has helped Dollarama maintain healthy same-store sales even amid changing macroeconomic conditions.
The retailer also has significant expansion runway, targeting 2,200 Canadian stores and 700 Australian locations by the end of fiscal 2034. Given its capital-efficient model, rapid store ramp-ups, and relatively modest maintenance capital requirements, this expansion could provide a durable foundation for revenue and earnings growth.
Additionally, Dollarama’s 60.1% stake in Dollarcity offers another avenue for long-term growth. Dollarcity operates 781 stores across Latin America and plans to expand its network to 1,050 stores by the end of fiscal 2031. With multiple avenues for expansion and a proven business model, Dollarama offers investors an attractive opportunity for long-term wealth creation.
Waste Connections
Second on my list is Waste Connections (TSX: WCN), a leading provider of non-hazardous solid waste management services across the United States and Canada. The company’s focus on secondary and exclusive markets limits competitive intensity and provides greater pricing power, supporting resilient margins and cash flows. Despite its ongoing acquisition activity, Waste Connections reported a robust adjusted earnings before interest, taxes, depreciation, and amortization margin of 32.8% in its most recent second-quarter results, highlighting the strength of its underlying business model.
The company also has multiple avenues for sustained growth through organic expansion and strategic acquisitions. After bringing seven renewable natural gas (RNG) facilities online, it plans to commission another five by year-end. Meanwhile, its strong financial position and healthy cash generation provide ample capacity for additional acquisitions, with management expecting activity to remain above normal this year and a sizeable pipeline of privately held targets.
Waste Connections is also investing in robotics, optical sorting, business analytics, and AI-powered productivity and pricing tools. These initiatives could enhance operating efficiency, improve pricing discipline, and support further margin expansion over time. With its differentiated market position, disciplined acquisition strategy, and multiple growth levers, Waste Connections offers a compelling long-term investment opportunity.
Celestica
My final pick is Celestica (TSX: CLS), a leading provider of critical infrastructure and advanced technology solutions that support the rapidly expanding AI and cloud-computing ecosystems. The accelerating adoption of AI across enterprises, governments, and consumers is prompting hyperscalers to scale their AI-ready data centre infrastructure, creating a substantial and potentially enduring growth opportunity for Celestica.
To capitalize on this secular trend, the company is investing in innovative products and services while expanding its manufacturing capabilities to deepen customer relationships and capture additional market share. Reflecting its strong growth outlook, management expects revenue and earnings per share to increase by 65% and 87%, respectively, this year. Management also anticipates further acceleration next year, supported by robust customer demand and an expanding pipeline of new program wins.
Despite its strong growth profile, Celestica continues to trade at a relatively reasonable valuation, with its next-12-month price-to-sales multiple at approximately 1.5. The combination of powerful AI-driven demand, expanding production capacity, robust growth prospects, and a reasonable valuation makes Celestica a compelling candidate for long-term investors.