Global equity markets have remained volatile this year amid escalating geopolitical tensions and rising energy prices. However, the recent ceasefire announcement involving the United States and Iran has provided some relief to investors. Optimism that both countries are close to striking a deal to end the war has also supported Canadian equities, with the S&P/TSX Composite Index rebounding 8.7% from its March lows.
Despite the ongoing uncertainty, long-term investors should avoid getting distracted by short-term market volatility and instead focus on high-quality growth stocks that can deliver superior returns over time. Growth companies typically expand their revenue and earnings faster than the industry average, enabling them to generate outsized long-term gains. However, this stronger growth potential often comes with higher valuations and increased business risk, making these stocks ideal for investors with a higher risk tolerance.
Against this backdrop, let’s look at two Canadian growth stocks that could deliver strong returns over the next year.
Celestica
Celestica (TSX:CLS) provides critical infrastructure solutions to hyperscale customers building and expanding data centres. Supported by its growing exposure to the rapidly expanding artificial intelligence (AI) market and strong financial execution, the stock has surged nearly 29% this year. In its recently reported first-quarter results, the company posted revenue of $4.05 billion, up 52.8% year over year, driven primarily by the strong performance of its Connectivity & Cloud Solutions (CCS) segment, where revenue climbed 76%. Meanwhile, revenue from its Advanced Technology Solutions (ATS) segment remained relatively flat at $0.81 billion.
Celestica’s adjusted earnings per share (EPS) came in at $2.16, exceeding management’s guidance range of $1.95 to $2.15. On a year-over-year basis, adjusted EPS rose 80%, supported by strong revenue growth, expansion in adjusted operating margin from 7.1% to 8%, and the repurchase of 0.1 million shares for $20 million.
Following its strong first-quarter performance, management raised its 2026 outlook and now expects revenue and adjusted EPS to grow at annualized rates of 53.2% and 67.8%, respectively. In addition, the company anticipates another year of strong revenue growth in 2027, supported by improved demand visibility and new program wins. Given these strong growth drivers, I believe Celestica is well-positioned to sustain its upward momentum and deliver impressive long-term returns for shareholders.
Savaria
Another growth stock that I am bullish on is Savaria (TSX:SIS), which designs, manufactures, and installs accessibility solutions for residential and commercial customers worldwide. Supported by its broad manufacturing footprint and extensive distribution network, the company markets its products across several global markets. Earlier this week, Savaria reported strong first-quarter results, with revenue rising 6.95% year over year to $235.4 million. In addition to healthy organic growth, acquisitions completed over the last four quarters also contributed to the company’s top-line expansion.
Meanwhile, adjusted EPS increased 34.8% to $0.31, supported by revenue growth and improving operating efficiency. Its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed 18.4%, while adjusted EBITDA margin expanded by 190 basis points to 20.4%.
Demand for Savaria’s products continues to rise amid an aging population and increasing adoption of in-home accessibility solutions. To capitalize on these favourable trends, the company is developing innovative products and building strategic partnerships to strengthen its market position. Backed by these growth drivers, management expects revenue to grow at an annualized rate of 12% through 2030, reaching $1.6 billion. The company also hopes to maintain an adjusted EBITDA margin above 20% while increasing adjusted EBITDA per share at an annualized rate of 10.4% to $4.25 in 2030.
In addition to its strong growth outlook, Savaria’s monthly dividend of $0.0467 per share yields 1.95% on a forward basis. With the stock trading at 19.9 times forward price to earnings, its valuation also appears reasonable, making Savaria an attractive long-term investment opportunity.
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Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Celestica. The Motley Fool has a disclosure policy.
