2 Reasons to Buy goeasy Stock Like There’s No Tomorrow

This TSX stock has a proven track record of delivering solid capital gains. It is a top choice for investors seeking value and income.

| More on:
concept of real estate evaluation

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you’re on the hunt for a Canadian stock with strong fundamentals and solid growth potential, look no further than goeasy(TSX: GSY), as there are solid reasons to buy it as if there’s no tomorrow. Over the past two decades, goeasy has established itself as a powerhouse in the subprime lending sector, consistently outperforming the broader market averages with its returns and making its investors rich.

This financial services company operates under three brands—easyfinancial, easy home, and LendCare—offering a wide range of financial solutions tailored primarily for subprime borrowers. These include unsecured and secured loans, lease-to-own services, and the popular buy-now-pay-later service.

The company’s financial track record speaks volumes. Between 2013 and 2023, goeasy achieved a compound annual growth rate (CAGR) of 19% in revenue. At the same time, its adjusted earnings per share (EPS) grew at a CAGR of an impressive 28.6%. So far, 2024 has seen even stronger performance, with revenue growing by 25% in the first six months. Meanwhile, its adjusted EPS increased by 24% during the same period.

Thanks to its stellar performance, goeasy’s shareholders have reaped significant rewards. For instance, goeasy stock has surged by a staggering 868% over the past decade, delivering an average annualized return of about 25.5%. Moreover, goeasy has delivered an average ROE (Return on Equity) of 26.4% in the last five years and enhanced its shareholders’ value through higher dividend payments.

Created with Highcharts 11.4.3Goeasy PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Against this backdrop, let’s explore two reasons to buy goeasy stock like there’s no tomorrow.

# Reason Number 1 to buy goeasy stock

Even though goeasy stock has appreciated quite a lot, it offers significant value near the current price levels, and its valuation looks highly attractive. goeasy’s next 12-month price-to-earnings multiple is 9.8, notably lower than its historical average. Moreover, the valuation appears compelling considering its solid double-digit earnings-growth potential, a dividend yield of 2.6%, and ROE of over 21%.

As a leader in Canada’s subprime lending sector, goeasy is well-positioned to capitalize on a large and growing addressable market. Its broad product portfolio, omnichannel approach, expanding geographic presence, and diversified funding sources provide solid tailwinds for future growth. These factors are expected to drive an increase in the company’s loan portfolio and boost overall revenues in the coming years.

goeasy is experiencing strong momentum across its key products and acquisition channels, particularly in unsecured lending and automotive financing. Additionally, the company’s solid credit underwriting capabilities, stable credit and payment performance, and enhanced operational efficiency will likely contribute to earnings growth and drive its share price higher.

# Reason Number 2 to buy goeasy stock

Besides offering value and growth, goeasy is a solid income stock due to its impressive track record of dividend payments. The company has consistently grown its dividend at an amazing rate, driven by its solid earnings performance. Given its solid payout history, goeasy has earned a place in the S&P/TSX Canadian Dividend Aristocrats Index in February 2020. Notably, goeasy increased its dividend at a CAGR of 42% in the prior five years before becoming part of the Dividend Aristocrats Index.

Since joining the index in 2020, goeasy has continued to reward shareholders handsomely. Its dividend has grown by 113%, reaching $0.96 per share in 2023. Further, in February 2024, goeasy raised its quarterly dividend by 21.9%, bringing it to $1.17 per share. This marked the company’s 10th consecutive year of dividend increases, making it a reliable choice for income-focused investors.

Bottom line

With a solid history of revenue and earnings growth, rising dividends, low valuation, and a leading position in the subprime lending sector, goeasy is poised to deliver stellar returns in the long run, making it a top choice for investors seeking value and income.

Should you invest $1,000 in goeasy right now?

Before you buy stock in goeasy, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and goeasy wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Dividend Stocks

3 Canadian REIT Stocks to Buy and Hold for the Next Quarter-Century

These three Canadian REITs trade cheaply and are highly reliable, making them some of the best stocks you can buy…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

ways to boost income
Dividend Stocks

Top Canadian Value Stocks I’d Buy for Dividend Growth and Appreciation

If you are looking for income and capital appreciation, here are three Canadian value stocks for a great total return…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Canadian Stock to Buy With $2,000 Right Now

The company’s powerful combination of growth, income, and value, positions it well to deliver solid returns, making it a smart…

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

This 10.6 Percent Dividend Stock Pays Cash Every Single Month

Are you looking to invest for a rainy day? This 10.6% dividend stock pays cash every month, irrespective of the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Market Dip: Opportunity or Risk This April?

This market dip might have investors worried, but should they be excited instead?

Read more »