It’s true that while investing $100 per week could give you $5,200 in income, annual dividend income simply isn’t going to add up and create $1,500 … yet.
And that’s the key here. Today, we’re going to discuss how investing that $5,200 year after year can easily create $1,500 eventually, and perhaps a lot sooner than you’d think.
The best stock to consider
If you’re looking for dividend income, then you’ll want a company offering up a high dividend for a great price — one that’s sure to do well in the years to come, offering growth and income after providing so much in the past.
One company I would consider is goeasy (TSX:GSY). goeasy stock is a Canadian-based financial services company that provides non-prime leasing and lending services through its two main operating divisions: easyfinancial and easyhome. goeasy stock focuses on serving consumers who may have limited access to traditional banking products and services due to credit challenges or other financial constraints.
Over the years, goeasy has expanded its presence across Canada, serving customers through a network of branches and online platforms. The company has also pursued strategic acquisitions and partnerships to broaden its product offerings and geographic reach. And that looks to continue in the year to come.
Doing well
Not only has goeasy stock done well in the last few years, it’s been doing well for decades. Yet these last few years have been no exception, with goeasy stock seeing a growth in its loan profile quarter after quarter.
The company, in fact, doesn’t see any issues with the federal budget’s plan last year to lower the annual percentage interest rate for loan providers to offer. Meanwhile, the spring budget kept these levels the same. And this should mean even more growth for goeasy stock in the future.
This is all to say that goeasy stock should continue to support its dividend, currently with a 2.7% dividend yield. And with even more coming through returns, it’s a strong stock to consider. So, let’s look at how long it might take you to reach that $1,500 level.
Breaking it down
In the case of goeasy stock, without including returns, it should take about a decade before goeasy stock provides annual dividend income of $1,500. This would be from investing $5,200 in the stock each year during that time. Meanwhile, you’ll see shares increase at a compound annual growth rate (CAGR) of 14% if history repeats itself as it has over the last 20 years.
In that time, the dividend has increased at a CAGR of 13%. So, let’s see what you could achieve in that decade.
| Year | Share Price | Shares Owned | Share Value | Annual Dividend Per Share | Annual Dividend | After DRIP Value | Annual Contribution | Year End Stock Price | New Shares Purchased | Year End Shares Owned | New Balance |
| 1 | $173.00 | 30.00 | $5,190.00 | $4.68 | $140.40 | $5,330.40 | $5,200.00 | $197.22 | 27.00 | 57.00 | $11,241.54 |
| 2 | $197.22 | 57.00 | $11,241.54 | $5.29 | $301.53 | $11,543.07 | $5,200.00 | $224.83 | 24.00 | 81.00 | $18,211.23 |
| 3 | $224.83 | 81.00 | $18,211.23 | $5.98 | $484.38 | $18,695.61 | $5,200.00 | $256.31 | 22.00 | 103.00 | $26,399.93 |
| 4 | $256.31 | 103.00 | $26,399.93 | $6.76 | $696.28 | $27,096.21 | $5,200.00 | $292.19 | 20.00 | 123.00 | $35,939.37 |
| 5 | $292.19 | 123.00 | $35,939.37 | $7.64 | $939.72 | $36,879.09 | $5,200.00 | $333.10 | 18.00 | 141.00 | $46,967.10 |
| 6 | $333.10 | 141.00 | $46,967.10 | $8.63 | $1,216.83 | $48,183.93 | $5,200.00 | $379.73 | 17.00 | 158.00 | $59,997.34 |
| 7 | $379.73 | 158.00 | $59,997.34 | $9.75 | $1,540.50 | $61,537.84 | $5,200.00 | $432.89 | 16.00 | 174.00 | $75,322.86 |
As you can see, by year seven, you will have achieved that mark of $1,500 and even higher. But you also will have significant returns, which makes this a solid stock for investors to consider — especially if they want more than just some dividends.
