Buy the Dip: 2 Top TSX Stocks You Can Hold Forever
Written by Aditya Raghunath at The Motley Fool Canada
Warren Buffett has often stated that you must be greedy when others are fearful. After reaching all-time highs in 2025, several stocks are trading below their record levels due to a challenging macro environment and an escalating trade war.
As it is impossible to predict the market bottom, investors with a sizeable risk appetite should get greedy and buy quality stocks while they trade at a lower multiple. In this article, I have identified two top TSX stocks you can buy on the dip and hold forever.
Valued at a market cap of $611 million, Magellan Aerospace (TSX:MAL) has returned more than 100% to shareholders in the last five years. Magellan is an integrated aerospace company providing global complex assemblies and systems solutions. In 2024, it reported revenue of $942.4 million, an increase of 7.1% year over year. Further, income more than tripled to $35.3 million in 2024, up from $9.2 million in 2023.
In the last 12 months, Magellan has faced industry-wide challenges such as supply chain delays, labour shortages, and market disruptions like the Boeing machinist strike. To offset these headwinds, the company's business development and commercial teams renegotiated customer and supplier agreements and mitigated inflationary pressures.
Alternatively, as a diversified supplier of aero-engine and aerostructure components for commercial and defence markets, Magellan is well-positioned to benefit from industry tailwinds. In 2024, the commercial aerospace sector saw record-breaking aircraft orders at Boeing and Airbus, while the defence sector continues to experience strong demand driven by global fleet modernization efforts.
Looking ahead to 2025, Magellan expressed cautious optimism that the industry issues of recent years are subsiding, though potential challenges like U.S. trade tariffs remain on the horizon.
Analysts tracking the TSX stock expect sales to rise to $1.01 billion in 2025 and $1.13 billion in 2026. Comparatively, adjusted earnings are forecast to expand from $0.62 per share in 2024 to $1.53 per share in 2026. So, priced at 7.1 times forward earnings, the TSX stock is quite cheap and trades at a discount of 40% to consensus price targets.
Valued at a market cap of US$125 billion Shopify (TSX:SHOP), is a leading global commerce technology company, serving millions of merchants across 175 countries. Its merchant base is geographically diverse, with 45% in the United States, 30% in Europe, the Middle East and Africa, 15% in Asia Pacific, Australia and China, 5% in Canada, and 5% in Latin America.
In 2024, Shopify reported revenue of US$8.9 billion, an increase of 26% year over year. Shopify's business model consists of two key revenue components. Its subscription solutions account for 26% of total revenues, while merchant solutions generate 74% of the top line. In 2024, subscription solutions revenues increased by 28% year over year to US$2.4 billion, while merchant solutions revenues grew by 25% to US$6.5 billion.
Shopify's merchant-first approach focuses on providing an integrated back-end system that streamlines operations across multiple sales channels. As of December 31, its monthly recurring revenue (MRR), a key performance indicator, reached US$178 million, up 24% year over year from US$144 million.
Wall Street expects Shopify's adjusted earnings to expand from US$1.26 per share in 2024 to US$2.5 per share in 2027. If the TSX tech stock can sustain its current multiple, it should double from current levels in the next three years.
The post Buy the Dip: 2 Top TSX Stocks You Can Hold Forever appeared first on The Motley Fool Canada.
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Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.
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