Long-term investing is an effective way to build substantial wealth. It involves buying high-quality companies with durable competitive advantages and strong earnings growth potential, then holding them for decades to harness the power of compounding.
This approach also reduces the need for frequent portfolio monitoring and lowers transaction costs by minimizing trading activity. With that in mind, here are three Canadian stocks that could deliver outsized returns over the long term.
Dollarama
Dollarama (TSX:DOL) is an excellent addition to a long-term portfolio, supported by its defensive business model and attractive growth prospects. Through its efficient direct-sourcing strategy and streamlined logistics network, the discount retailer can offer a broad range of consumer products at attractive price points, enabling it to generate healthy same-store sales growth across various economic environments.
Moreover, Dollarama continues to pursue an ambitious expansion strategy, planning to increase its Canadian store count from 1,719 to 2,200 and its Australian store network from 410 to 700 by the end of fiscal 2034. To support this growth, the company is constructing a new distribution center in Calgary, which could become operational by the end of next year, improving supply chain efficiency and supporting expansions across Western Canada.
Additionally, Dollarama has exposure to high-growth Latin American markets through its 60.1% stake in Dollarcity. The contribution from Dollarcity could continue to rise in the years ahead, as it aims to expand its store network from 752 to 1,100 by the end of 2031. Given its resilient business model and multiple growth drivers, I believe Dollarama is well-positioned to sustain its long-term growth trajectory and continue delivering attractive returns for investors.
Fortis
Another stock I believe would be an excellent choice for long-term wealth creation is Fortis (TSX:FTS). The electric and natural gas utility serves approximately 3.5 million customers across North America. Supported by its regulated asset base and significant exposure to low-risk transmission and distribution operations, the company’s financial performance is less sensitive to economic cycles, commodity price fluctuations, and broader market volatility.
Its regulated business model generates reliable, predictable cash flows, enabling Fortis to pay dividends for 52 consecutive years. The utility currently offers a forward dividend yield of 3.1%, making it an attractive option for income-focused investors.
Looking ahead, economic growth, electrification trends, and rising power demand from AI-driven data centres are driving higher electricity consumption across North America, underscoring the growing importance of Fortis’s infrastructure and services. To capitalize on these opportunities, the company plans to invest $28.8 billion over the next five years to expand and modernize its asset base.
These investments could grow Fortis’s rate base at an annualized rate of 7% through 2030, supporting steady earnings growth. Backed by this expansion, management expects to increase its dividend by 4–6% annually through 2030, reinforcing Fortis’s appeal as an ideal long-term investment.
Celestica
My final pick is Celestica (TSX:CLS), a high-growth technology stock that has delivered exceptional returns over the past three years, with its share price surging by more than 2,380%. Strong financial performance and growing exposure to the rapidly expanding artificial intelligence (AI) market have boosted investor confidence and driven the stock sharply higher.
The accelerating adoption of AI across enterprises, governments, and consumers is prompting hyperscalers to invest heavily in AI infrastructure, creating significant long-term growth opportunities for Celestica, a key supplier of networking and hardware solutions for data centres and AI infrastructure.
To capitalize on this favourable backdrop, the company continues to focus on product innovation and expand its manufacturing capabilities, including the development of a new facility in Fort Worth, Texas. These initiatives should strengthen Celestica’s competitive position and support continued financial growth in the years ahead.
Given its strong execution, impressive growth trajectory, and exposure to powerful secular trends in AI and data centre spending, I believe Celestica has the potential to deliver oversized returns over the long term.
