Stocks that are expected to significantly grow their profitability in the future can add meaningful upside to your portfolio. Hudbay Minerals and North West are examples of many high-growth stocks that the market believe will be upcoming outperformers. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good additions to your portfolio.
Hudbay Minerals Inc. (TSX:HBM)
Hudbay Minerals Inc., an integrated mining company, together with its subsidiaries, focuses on the discovery, production, and marketing of base and precious metals in North and South America. Established in 1927, and now led by CEO Alan Hair, the company employs 2,040 people and has a market cap of CAD CA$2.62B, putting it in the mid-cap group.
HBM’s forecasted bottom line growth is an optimistic 20.46%, driven by the underlying double-digit sales growth of 14.85% over the next few years. An affirming signal is when net income increase is supported by top-line growth. Since net income isn’t artificially inflated by one-off initiatives such as cost-cutting, we know this profit growth is more likely to be sustainable. This prospective profitability should trickle down to shareholders, with analysts expecting the company to generate a positive return on equity of 9.03%. HBM ticks the boxes for robust growth generation on all levels of line items, which makes it an appealing stock to dig into deeper. Considering HBM as a potential investment? I recommend researching its fundamentals here.
The North West Company Inc. (TSX:NWC)
The North West Company Inc., through its subsidiaries, engages in the retail of food and everyday products and services to rural communities and urban neighborhood markets in Canada, Alaska, the South Pacific, and the Caribbean. Formed in 1668, and run by CEO Edward Kennedy, the company now has 7,597 employees and with the market cap of CAD CA$1.35B, it falls under the small-cap group.
NWC’s projected future profit growth is a robust 31.51%, with an underlying 9.49% growth from its revenues expected over the upcoming years. Though some cost-cutting activities may artificially inflate margins, it appears that this isn’t solely the case here, as profit growth is also coupled with top-line expansion. We see this bottom-line expansion directly benefiting shareholders, with expected return on equity coming in at a notable 24.86%. NWC ticks the boxes for robust growth generation on all levels of line items, which makes it an appealing stock to dig into deeper. Thinking of investing in NWC? Other fundamental factors you should also consider can be found here.
Polaris Infrastructure Inc. (TSX:PIF)
Polaris Infrastructure Inc., a renewable energy company, acquires, explores, develops, and operates geothermal energy projects in Latin America. The company currently employs 128 people and with the company’s market cap sitting at CAD CA$300.24M, it falls under the small-cap category.
PIF’s forecasted bottom line growth is an exceptional 91.98%, driven by the underlying double-digit sales growth of 27.75% over the next few years. An affirming signal is when net income increase also comes with top-line growth. Even though some cost-reduction initiatives may have also pushed up margins, in the case of PIF, it does not appear too severe. Moreover, the 37.62% growth in operating cash flows shows that a decent part of earnings is driven by robust cash generation from operational activities, not one-off or non-core activities. PIF’s bullish prospects on both the top and bottom lines make it an interesting stock to invest more time to understand how it can add value to your portfolio. Should you add PIF to your portfolio? Check out its fundamental factors here.
For more financially robust companies with high growth potential to enhance your portfolio, use our free platform to explore our interactive list of these stocks.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.