Investing $10,000 in dividend stocks is one of the smartest moves for building passive income. By focusing on dividend-paying stocks, investors benefit from regular cash flow, the potential for capital appreciation, and the compounding effect of reinvested dividends. But when it comes to returns and dividends, there is one that stands out. So, let’s get into it.
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goeasy stock
When it comes to dividend stocks, goeasy (TSX:GSY) has been a standout performer on the TSX. Known for providing non-prime lending solutions, goeasy stock has consistently delivered strong financial results, supporting both its growth and its ability to reward shareholders. In its most recent earnings report for the third quarter of 2024, the dividend stock achieved record loan originations of $839 million, representing a 16% increase from the previous year. Revenue was equally impressive, climbing 19% year over year to $383 million. These results underscore the company’s ability to grow its business even in a competitive lending environment.
What’s particularly enticing about goeasy for dividend investors is its long track record of increasing payouts. As of late 2024, the dividend stock offers a forward annual dividend of $4.68 per share, yielding 2.75%. More importantly, goeasy has increased its dividend for 10 consecutive years, showing its dedication to returning value to shareholders. This growth in dividends signals not only financial stability but also management’s confidence in the dividend stock’s future performance.
The past performance of goeasy further highlights why it’s a compelling investment. Over the last decade, goeasy’s stock price has risen significantly, rewarding investors with both capital gains and growing dividends. Despite economic headwinds, the dividend stock has continued to innovate, expand its product offerings, and capture market share. Its ability to maintain high levels of profitability, evidenced by a return on equity (ROE) of 25.7% in Q3 2024, is a testament to its operational efficiency and sound financial management.
Future outlook
Looking ahead, goeasy has a bright future. The dividend stock’s loan portfolio grew to $4.39 billion in the third quarter (Q3) of 2024, a 28% increase from the previous year, showing robust demand for its services. Management outlined strategic plans to diversify its offerings and reach new customer segments, positioning the company to maintain its impressive growth trajectory. With a forward price-to-earnings (P/E) ratio of 8.39, goeasy is also attractively valued compared to many of its peers, offering a potential bargain for investors seeking both income and growth.
In addition to its strong fundamentals, goeasy has the financial strength to weather economic downturns and continue rewarding investors. Its payout ratio of just 27.26% leaves plenty of room for future dividend increases, even in challenging times. Furthermore, its consistent earnings growth, up 28.1% year over year in Q3 2024, provides a solid foundation for sustaining and increasing dividend payouts.
Bottom line
So how much could that $10,000 earn an investor in the next year? Should goeasy stock climb by another 32% in the next year, adding on dividends, this is what investors could achieve.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT |
| GSY – now | $170.75 | 59 | $4.68 | $276.12 | quarterly | $10,000 |
| GSY – 32% | $225.39 | 59 | $4.68 | $276.12 | quarterly | $13,298.01 |
You have $3,298.01 in returns and $276.12 in dividends. That totals $3,574.13! Therefore, allocating $10,000 to dividend stocks is a powerful strategy for building passive income. goeasy stands out as a top choice. Its strong earnings growth, history of dividend increases, and optimistic future outlook make it a compelling option for investors. Whether you’re looking to generate steady income, grow your portfolio, or both, goeasy offers a unique opportunity to achieve your financial goals.
