Although the uncertain stock market environment has lasted for over a year, this environment in which many high-quality stocks, especially ones with significant growth potential, trade cheaply won’t last forever. So it’s essential to take advantage while you can still buy these top-notch growth stocks while they are undervalued.
Growth stocks are some of the best to buy now because these stocks have seen some of the biggest declines in share prices. High-quality growth stocks typically trade at a premium. So as the market environment worsens and uncertainty picks up, often the best discounts are in these long-term growth stocks.
And while there are many companies to consider buying on the market today, one of the very best growth stocks to buy now is goeasy (TSX:GSY), the specialty finance company.
So if you’ve got cash and are looking to take advantage of the current market environment, here are three reasons to buy goeasy stock today.
goeasy stock has significant growth potential
One of the main reasons why goeasy is one of the best growth stocks to buy today is that it has been an impressive company for years now. The stock continues to grow both its revenue and earnings at a rapid pace.
For example, in the last five years alone, goeasy’s sales have grown from $405 million in 2017 to more than $1 billion last year, an increase of 152%. Furthermore, its normalized earnings per share have increased from $2.97 to $11.55 over that stretch, an incredible jump of more than 288% in just five years.
One of the reasons goeasy has been so successful at expanding its business is that it continues to find new avenues of growth. Furthermore, the demand for loans from below-prime borrowers has continued to increase as well.
Plus, in addition to rapidly growing its operations, goeasy has also been adept at managing its loan portfolio and keeping its charge-off rate within its target range. Therefore, it’s no surprise why goeasy stock continues to see strong profitability.
goeasy stock is highly profitable
Although goeasy offers loans to below-prime borrowers and is therefore a slightly higher risk stock than the banks, for example, its consistent ability to manage risks and keep charge-off rates low has led to impressive profitability for goeasy over the years.
In fact, in the last 12 months, goeasy’s return on equity has been 20%. And in the last five years, it has been above 20% every single year except for 2022, when the economy was quickly worsening due to the rapid increase in inflation.
Plus, even with the worsening economy, goeasy still managed to earn a return on equity of 16.9% – still well ahead of big bank stocks, which typically see returns on equity between 10% and 15%.
Therefore, goeasy stock is easily one of the best growth stocks you can buy now, as it continues to expand its operations, grow its profitability, and most importantly because it’s so cheap.
This impressive growth stock is one of the best to buy while it’s still undervalued
Savvy investors know that it’s not only about finding a good stock to buy; it’s about finding a good stock to buy at the right price.
And although goeasy has been rallying lately, up over 16% in just the last month, it continues to trade undervalued.
For example, right now, goeasy is trading at a forward price-to-earnings ratio of a modest 9.2 times. That’s extremely cheap, especially for a stock growing as fast as goeasy. Plus, it’s also significantly lower than its 10-year average of 10.4 times.
In addition, goeasy stock currently offers a dividend yield that’s just shy of 3%, which is above its historical average of 2.4%. Not to mention goeasy is now a dividend aristocrat and continues to increase its dividend each year.
Therefore, while this impressive long-term growth stock continues to trade at an appealing valuation, it’s easily one of the best growth stocks to buy now.
