The S&P/TSX Capped Financial Index rose just 0.35% on Wednesday, January 24. In this piece, I want to zero in on one of the most exciting financial stocks available on the Toronto Stock Exchange (TSX). That stock is goeasy (TSX:GSY). This Mississauga-based company provides non-prime leasing and lending services under the easyhome, easyfinancial, and LendCare brands to consumers in Canada.
Today, I want to explore three things about goeasy that every smart investor knows, or should know, in the early part of 2024. Let’s jump in.
goeasy has been one of the top growth stocks in the financials space
goeasy has been one of the most explosive growth stocks on the broader TSX, let alone the financial space. That has made it a favourite target of investors who have been on the hunt for big growth in the first half of the 2020s. Shares of goeasy have been quite static in the month-over-month period as of close on January 24. Indeed, the financial stock has moved down marginally over this trading period.
Shares of goeasy have increased 30% year over year as of close on January 24. Moreover, the stock has soared over 300% in a five-year span at the time of this writing. goeasy’s performance was especially impressive during the COVID-19 pandemic. Its stock succumbed to the early 2020 market pullback, falling below the $30 price mark in March. By April 2021, a little over a year later, goeasy stock had climbed above the $130 price point.
What is the reason for its explosive performance? Let’s glance at the company’s earnings.
The company has posted consistently strong earnings for years
Investors can expect to see goeasy’s fourth-quarter (Q4) and full year fiscal 2023 earnings in the middle of February. The company unveiled its Q3 FY2023 earnings back in November 2023. In the quarter, loan originations climbed 13% year over year to $722 million, while the company’s loan portfolio grew 33% to a whopping $3.43 billion. Meanwhile, revenue rose 23% to $322 million.
goeasy’s largest brand, easyfinancial, delivered record revenue of $284 million in Q3 — up 26% over Q3 2022. Moreover, it posted record volume of credit applications and record new customer volume of 42,700. Overall, goeasy has achieved 89 straight quarters of positive net income. It also delivered its 54th consecutive quarter of same-store revenue growth.
Looking ahead, goeasy is in a great position to take advantage of the soaring demand for non-prime leasing and lending. Canadians are living under increased financial pressure due to rising inflation and the highest interest rates in over 15 years.
goeasy is a Dividend Aristocrat
A Canadian Dividend Aristocrat is a stock that has achieved at least five straight years of dividend growth. Five years is not a guarantee of dividend stability, but it does show a solid history for investors to consider. The fact that goeasy is nearing the decade mark in terms of dividend growth speaks to its track record.
goeasy last paid out a quarterly dividend of $0.96 per share. That represents a 2.4% yield. The company has now delivered dividend increases for nine consecutive years. Shares of goeasy currently possess a price-to-earnings ratio of 13, which puts this growth stock in favourable value territory compared to its industry peers.