Goeasy Stock: Buy, Sell, or Hold?

When it comes to smart buys, goeasy stock (TSX:GSY) is up there as one of the smartest money can buy. Especially with a dividend to consider.

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If there was ever a stock to consider a strong buy these days, it has to be goeasy (TSX:GSY). Despite rising higher and higher in recent years, the company remains one of the easiest stocks to say “yes” to. So today, let’s get into why investors should consider buying goeasy stock on the TSX today.

Records on records

Even though goeasy stock has been around since the 1990s, the company continues to achieve record after record during earnings. The company provides loans, and leases out appliances and furniture, and is seeing more and more loan growth as the years go on.

In fact, despite rising interest rates, goeasy stock managed to hit yet another consecutive loan originations record during its latest earnings report. Loan originations came in at $722 million, up 13% from the year before, creating a $3.4 billion portfolio, a 33% increase.

Revenue also saw double-digit increases, reaching $322 million and up 23% from 2022 levels. Furthermore, diluted earnings per share hit $3.87, up 35% year over year. All to say, higher interest rates have actually led to even more people seeking out goeasy stock for loans.

Could it come crashing down?

In short, no. The company has seen loans grow as Canadians who need loans look for the lowest-priced option. And those who will need to renew their interest rate in the near future will likely see another surge in the lender’s loan originations as well.

Furthermore, during a bull market with more cash on hand, Canadians are likely to start taking out loans and purchasing more once again. This again will help along goeasy stock, resulting in even more loan growth. So really, no matter the market, it seems goeasy stock will remain solid.

There was the one issue last year when the federal government announced during its federal budget that it would be lowering the annual percentage rate (APR) for loan providers. Yet even this proved positive news for goeasy stock. The company doesn’t have many APRs above the maximum rate, and thinks this will instead weed out those providing rates that are too high, sending them to goeasy instead.

Bottom line

So it seems no matter how you slice it, goeasy stock looks like a solid buy. The company has a long history of strong growth, with shares up 236% in the last five years alone! It has proven that even in the most volatile of situations, from pandemics to economic downturns, it can come out the other end. And, of course, through all this it has been a strong dividend provider.

The company now provides a 2.48% dividend yield as of writing, with shares up 39% in the last year alone. Yet it’s still valuable trading at 12.9 times earnings, with shares below all-time highs. Add to this that it trades at 2.2 times sales, 2.5 times book value, and 7.5 enterprise value (EV) over earnings before interest, taxes, depreciation and amortization (EBITDA).

Taken all together, goeasy stock remains a valuable stock with even more growth likely in the future. Therefore, it’s still a strong buy on the TSX today.

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 has positions in goeasy. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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