On the surface, it might seem impossible that goeasy (TSX:GSY) stock could rise any higher. After all, the loan provider has already increased 40% in the last year. Yet analysts across the board believe there is even more room to run for this record setter.
So, let’s look at what investors can expect from goeasy stock in the future. And why now has never been a better time to buy.
Keeps getting better
Quarter after quarter, goeasy stock has put out record results. The company achieved yet another record quarter of loan originations during its third quarter report back in November. It achieved $722 million in loan originations, up 13% from the year before. This brought its total loan portfolio to a record $3.43 billion, up an enormous 33% from 2022 levels!
Revenue also increased 23% to $322 million, with its diluted earnings per share up 35% to $3.87. It wasn’t just acquisitions creating this growth either, with organic growth also proving to be worthwhile during the quarter. What’s more, the stock continued to experience stable credit and payment performance, with its allowance for future credit losses reduced to 7.37% from 7.42% in the quarter.
“Record growth and reduced credit losses contributed to record earnings, with adjusted diluted EPS increasing 29% over the same quarter last year. With the weighted average credit score of our originations increasing for eight consecutive quarters, and this past quarter having the highest weighted average score in our history, we continue to improve the credit quality of our portfolio. Looking forward, we remain confident that we will meet, or exceed, all of our commercial forecasts.”
Jason Mullins, goeasy’s president and chief executive officer
Can they keep it up?
That’s the big question. While management does seem convinced that the company will certainly exceed its future outlook for 2023 during the fourth quarter, the question is whether goeasy stock will continue to experience such growth in 2024 and, indeed, beyond.
The key here, however, is that the company is a provider of low interest rates. Granted, the federal government announced during its budget last year that annual percentage rates would need to come down for these companies. But goeasy stock wasn’t worried at all.
The announcement had them believe that whether it’s high interest rates or low, goeasy stock will continue to be a top choice. Companies offering those higher interest rates will be weeded out, creating less competition for the stock in the future. So, it remains a strong option that should only get stronger when interest rates decrease once more.
History repeats itself
What’s the best part about goeasy stock? This company has been through a lot of history. The loan provider has seen several recessions along with a pandemic and come out strong on the other side. Management seems to know exactly what they’re doing, with about 30 years behind them of figuring out their successful strategies.
So, not only does goeasy stock now look like a strong growth stock, with even more room to run, it also has a long history of dividend growth. The company is a Dividend Aristocrat, with over five years of consecutive dividend increases. And given its consistent record status, that should only continue.
For now, you can pick up goeasy stock with a dividend yield at 2.4%, slightly higher than its five-year average of 2.35%. And as for returns, there is still a 25% potential upside to reach all-time highs. So, is goeasy stock a no-brainer buy? With this history, absolutely.
