2 Non-Tech TSX Growth Stocks That Possess More Upside

Do you want to advance your retirement plan? Consider buying some shares in these non-tech growth stocks over time.

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Both goeasy (TSX:GSY) and Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) have just reported their second-quarter (Q2) earnings results. goeasy stock popped more than 5% yesterday and is up about 46% from its 52-week low. Similarly, BAM stock popped 1% and is 23% higher from its 52-week low. The non-tech TSX growth stocks still have long growth runways. Moreover, they still trade at good valuations.

This TSX growth stock is still a solid buy

A high inflationary environment seems to have assisted with a greater volume of credit applications at goeasy, the leading non-prime Canadian consumer lender. The company experienced record loan originations of $628 million, up 66% versus Q2 2021. This growth was driven by a record volume of credit applications that were up 51% over the prior year. Consequently, the company experienced record organic growth in the loan portfolio of $216 million, up 191% year over year (YOY).

At the end of Q2, goeasy’s gross consumer loan receivable portfolio was $2.37 billion, up 32% from a year ago. Importantly, during the quarter, the consumer lender also continued to experience stable credit and payment performance. The press release reported a “net charge off rate [of] 9.3%, in line with the company’s target range of between 8.5% and 10.5% on an annualized basis.”

Ultimately, for the first half of the year (H1), goeasy reported the following:

  • Record revenues of $484 million, up 30%
  • Operating income of $165 million, an increase of 38%
  • Record adjusted net income of $92.6 million, up 15%
  • Record adjusted diluted earnings per share of $5.55, up 12%

Management forecasts 2022 revenue to be about $1.02 billion, an operating margin of +35%, and an impressive return on equity (ROE) of +22%. Through 2024, it expects a revenue-growth rate of about 14%, incremental improvements in the operating margin and high ROE of +22%.

The dividend stock is fairly valued versus its long-term normal valuation. Analysts are optimistic about goeasy stock, having a consensus price target suggesting 42% 12-month upside potential from $138.46 per share. People will still continue to borrow from goeasy. So, its long growth trajectory remains intact.

BAM: A low-risk, large-cap growth stock

Since the end of Q1, BAM experienced record inflows of US$56 billion, of which US$41 billion was raised in Q2. The global alternative asset manager now has a record of US$111 billion of cash and capital available for investment after generating close to US $1.5 billion of net income and US$1.2 billion of operating cash flow. 

Fee-bearing capital increased by US$67 billion over the past 12 months to US$392 billion. Fee-related earnings were US$2.0 billion for the last 12 months, representing a 21% increase YOY. Furthermore, the company has about US$36 billion of committed capital for deployment that would add roughly US$360 million of fees annually.

Since Q1, BAM sold US$21 billion of assets — close to half were real estate operations — realizing US$5 billion of gains. The value investor also deployed US$20 billion into new investments for future growth, indicating that compelling investment opportunities are still available.

Analysts believe BAM has another 28% upside over the next 12 months. Longer term, the company still has tonnes of growth potential.

A friendly reminder that the stock will spin off a 25% interest in its asset management business, a strong cash flow generator, by the end of the year.

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 Kay Ng has positions in Brookfield Asset Management Inc. CL.A LV and goeasy. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV.

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