Investing in small-cap stocks can be an excellent long-term wealth-building strategy. These companies often operate in growth phases, providing investors with opportunities for outsized returns compared to larger, more mature corporations. However, small-cap investing also comes with higher volatility and risk, as their share prices tend to react sharply to changes in market sentiment.
That’s why it’s important to focus on small-cap stocks with strong fundamentals, capable management, and a clear growth trajectory. When selected wisely, they can significantly enhance a diversified portfolio’s returns.
Also Read: Best Growth Stocks to Buy Now
Here are two small-cap TSX stocks that look well-positioned for long-term growth right now.
- Bird Construction (TSX:BDT)
Bird Construction stands out as one of the more attractive small-cap names on the TSX today. The company provides construction and maintenance services across Canada, backed by a strong presence in key domestic markets. Over the past three years, its share price has climbed more than 350%, reflecting consistent execution and expanding profitability.
Bird’s strategy of diversifying operations and adopting a collaborative contracting model—where risks are shared between the company and clients—has helped it maintain stable margins even during uncertain market conditions. The firm’s focus on essential sectors such as power, defence, and transportation infrastructure ensures steady cash flows and positions it to benefit from long-term infrastructure investment trends.
With a healthy balance sheet, a robust project backlog, and ongoing efforts to strengthen its infrastructure capabilities, Bird Construction appears well-prepared to continue its growth momentum. Investors looking for a small-cap stock with both stability and upside potential should keep this one on their radar.
Also Read: Investing for Beginners Canada
- Ballard Power Systems (TSX:BLDP)
Ballard Power Systems is another small-cap stock worth watching. A pioneer in hydrogen fuel cell technology, Ballard designs, manufactures, and services proton exchange membrane (PEM) fuel cell products used in various clean energy applications. The company also provides technical solutions and after-sales services, reinforcing its position in the global hydrogen ecosystem.
Despite challenges in the pace of fuel cell adoption, Ballard’s stock has rallied about 160% over the past year—driven by renewed investor optimism and management’s focus on operational efficiency. The company is undergoing a major restructuring initiative aimed at cutting annualized operating costs by roughly 30% by 2026, which should improve profitability and support its goal of achieving positive cash flow by 2027.
Ballard is concentrating its efforts on commercially viable, high-margin fuel cell products while scaling back non-core projects. Its ongoing investments in next-generation stack technology and cost reductions should enhance competitiveness and margins.
As the world transitions to low-carbon energy, Ballard Power is strategically positioned to capitalize on growing demand for hydrogen-based solutions. Its disciplined execution and improved financial discipline make it a strong small-cap candidate for investors seeking exposure to clean energy growth.
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