If you're looking for two growth stocks that could soar in 2025 and beyond, Calian Group (TSX:CGY) and Lumine Group (TSXV:LMN) are compelling picks. Both growth stocks have strong fundamentals, exciting growth potential, and unique niches in thriving industries. Let's dive into why these growth stocks deserve a spot on your watchlist.
Calian stock
Calian Group, headquartered in Ottawa, is a diversified company providing services ranging from healthcare to cybersecurity and advanced technology. It's like that overachieving kid in class who's not just great at one subject but excels across the board.
The growth stock's revenue for the trailing 12 months reached $741.39 million, reflecting an impressive 11.1% year-over-year growth. Despite a dip in quarterly earnings, Calian is a long-term play, supported by a robust operating cash flow of $90.51 million and a manageable debt-to-equity ratio of 39.88%. With a forward price-to-earnings (P/E) ratio of just 10.13, the stock seems undervalued, considering its diversification and growth trajectory.
What sets Calian apart is its ability to pivot and adapt. The growth stock has steadily built a reputation for acquiring complementary businesses, which has helped it diversify its revenue streams. Over the past year, its market cap has hovered around $590.59 million, showcasing resilience even amid market volatility. For investors eyeing dividends, Calian recently announced an annual dividend yield of 2.33%, a cherry on top for growth-oriented portfolios.
Lumine
Lumine Group is a rising star in the vertical market software industry. Think of it as a savvy investor who buys under-appreciated software businesses and transforms them into winners. Lumine's strategy mirrors that of its parent company, Constellation Software, which has already proven that this model works wonders. Over the past year, Lumine's quarterly revenue growth shot up by 35.1%, reaching $624.36 million in the trailing 12 months. The growth stock also maintains a healthy current ratio of 1.96, signalling strong liquidity.
Despite being relatively new to the scene, Lumine's stock price has surged by 86.22% over the past year, indicating investor confidence. Its market cap now sits at a hefty $11.75 billion, and with a forward P/E ratio of 41.67, the stock is trading at a premium, but for good reason. Lumine has the potential to dominate its niche market. It is supported by an aggressive acquisition strategy and a dedicated management team. For long-term investors, it's a bet on the continued digital transformation across industries.
Future focus
Looking ahead, both Calian and Lumine have bright futures. Calian's focus on cybersecurity and healthcare aligns with two of the fastest-growing sectors globally. The increasing demand for robust security solutions and the aging population's healthcare needs provide Calian with tailwinds that are hard to ignore. Lumine, however, benefits from the digitization of traditional industries. Its portfolio companies cater to essential sectors like communications and media, making it a solid play for the tech-savvy investor.
Past performance is another reason to believe in these companies. Calian's disciplined approach to growth has led to steady returns for shareholders, with a beta of 0.89, signalling lower volatility. Lumine's meteoric rise since its public debut reflects its ability to execute its acquisition-focused strategy with precision.
Both growth stocks are set to benefit from their strong financials and visionary leadership. While Calian leverages its diverse offerings to hedge against market risks, Lumine focuses on dominating a specific niche with razor-sharp precision. These approaches make them complementary additions to any growth-focused portfolio.
Bottom line
As with any investment, risks remain. For Calian, geopolitical tensions could impact its government contracts, while Lumine's growth depends heavily on successful acquisitions. However, the strong balance sheets and proven business models mitigate these risks.
So, whether you prefer Calian's stable, diversified growth or Lumine's high-octane tech play, both stocks are poised to make waves in 2025 and beyond. If you're in it for the long haul, these companies could be the growth engines your portfolio needs.
