Motley Fool Canada investors continue to have a lot of interest in Lightspeed POS (TSX:LSPD)(NYSE:LSPD), and it’s no wonder. The tech stock has been a high flier during the last year or so. During the pandemic, e-commerce companies like Lightspeed stock took off. But investors may be aware that even before the pandemic, Lightspeed stock had a promising future.
However, if you’re seeking out a cheap tech stock with growth potential, you’re not looking at the right place.
Lightspeed stock’s growth slowing
Shares of Lightspeed stock boomed during the pandemic. The company reported earnings year over year that kept breaking records again and again. Shares in the last year are up 210% as of writing. Since coming on the market, shares are up an incredible 450%. That’s even higher and faster than major competitors.
The main rush to buy these days comes from the company’s recent acquisitions. Lightspeed stock has been on a spending spree the last year and a half. Since January 2020, it’s made almost US$2.3 billion in acquisitions — not in Canada and the United States, but with companies that give it access to over 100 countries.
Why? This supports the company’s “land-and-launch” approach. By landing in a company and launching slowly from there, rather and booming in one major market, it gets a diverse portfolio with far less a chance of collapsing. Of course, there is the first major purchases to consider, but it does look like this could be a solid strategy for the company.
So, yes, Lightspeed stock is a great stock. But is it a buy? Maybe not so much. The company is quickly approaching overbought territory with a Relative Strength Index (RSI) of 67 (overbought is 70). And its price to sales is sky high at 50.5 as of writing. Since it’s passed the $100 mark, share growth has severely slowed as well. So, it looks like Motley Fool Canada investors may have to look elsewhere for growth.
Luckily, I know just the place.
An easy choice
What if I told you there was a company that offered you incredible growth but also historical performance and dividends to boot? That’s what Motley Fool Canada investors will get when they invest in goeasy (TSX:GSY).
This company offers investors a way to get in on the tech action, but with more weight behind it. goeasy has been around for decades, with shares growing 20,574% since coming on the market in 1990. The company offers financial services and rent-to-own equipment. Through these arms, it’s created sustainable revenue streams, but in the last year that revenue has exploded with a combination of low interest rates and product innovation.
Shares grew by 194% in the last year alone, rivalling Lightspeed stock. Yet the stock is an absolute steal, offering a price-to-earnings ratio of 12 as of writing! On top of that, its RSI is more fair at 62. And did I mention it offers a dividend? It’s low at 1.66%, but that dividend yield has grown by a compound annual growth rate of 18.14% in the last decade.
Yes, Lightspeed stock is likely to continue growing, even for a few years. But that growth will eventually slow. goeasy has proven to Motley Fool Canada investors that it can continue surprising them again and again. It’s likely you’ll continue seeing such growth far into the future and will keep enjoying a dividend yield for years to come.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Amy Legate-Wolfe owns shares of Lightspeed POS Inc. The Motley Fool owns shares of and recommends Lightspeed POS Inc.