Passive income is a financial dream for many investors, and it’s often associated with dividend income. However, there’s another avenue to passive income through returns, where your investments grow over time, generating wealth without the need to actively trade.
In this article, we’ll explore the potential of two stocks, Franco-Nevada (TSX: FNV) and goeasy (TSX: GSY), that offer both passive income and incredible long-term returns.
Franco-Nevada: Unearthing opportunities
Franco-Nevada stock is a leading gold-focused royalty and streaming company. Over the past five years, the company has shown remarkable growth and resilience. Notably, in 2023, its share price increased from $188 to $192, reflecting a steady climb, despite market fluctuations.
When we look back further, from 2013 to 2023, FNV’s share price has grown from $47 to $192 as of writing this article. That’s an impressive 308% increase in the last decade. This growth translates to a compound annual growth rate (CAGR) of approximately 15.38%, showcasing its potential to deliver substantial returns to long-term investors.
What makes FNV a promising investment is its strong financial position. The company holds no debt and boasts $2.3 billion in available capital as of June 30, 2023. It generated $261.9 million in operating cash flow during the quarter. FNV also stands out in the environmental, social, and governance (ESG) space, ranking as the number one gold company by Sustainalytics, with AA ratings from MSCI and Prime status from ISS ESG. It’s committed to responsible gold mining practices and has ambitious diversity goals for its leadership.
Given its operational growth and stability in the mining industry, FNV stock is well positioned to continue its upward trajectory.
goeasy: Navigating financial growth
goeasy stock, a Canadian financial services company, has experienced significant developments over the past five years. In 2023, its share price jumped from $105 to $123, though it has exhibited some volatility. Nonetheless, its ability to maintain an upward trend in a turbulent market is noteworthy.
Looking at the past decade, from 2013 to 2023, GSY’s share price has grown from $14 to $123 as of the writing of this article. This astonishing growth represents a CAGR of approximately 25.43%, showcasing GSY’s potential to deliver exceptional returns.
GSY’s financial performance reinforces its attractiveness as an investment option. In particular, its loan originations have increased by 6% from $628 million to $667 million. The loan portfolio has surged by 35%, reaching $3.20 billion from $2.37 billion. Revenue has climbed by 20% from $252 million to $303 million. Moreover, the company’s diluted EPS has risen by 41%, reaching $3.26, and adjusted diluted EPS stands at $3.28, up 16% from $2.83.
With a focus on the personal finance and loan industry, goeasy continues to provide record-setting results, indicating that it’s well equipped for future growth.
Bottom line: Investing for the long haul
Both Franco-Nevada stock and goeasy stock have demonstrated remarkable growth potential over the past decade. FNV’s stability in the mining industry and strong financial position make it an attractive choice for long-term investors. However, GSY’s impressive performance in the personal finance and loan sector showcases its ability to generate consistent returns.
These stocks have already seen incredible passive income through returns. What’s more, their operational growth in recent years suggests that this trend is likely to continue. While the market may experience fluctuations, FNV and GSY seem well positioned to provide stable growth and passive income for investors over the long term. As always, it’s essential to conduct thorough research and consider your own financial goals before making any investment decisions.
