Investing in high-growth stocks could help generate significant capital gains over time. These Canadian companies are likely to grow at an above-average rate and deliver solid returns.
When choosing growth stocks, look for companies that are leaders in their markets, with fast-growing revenues and profits, and offer a high return on equity (ROE). Focus on businesses with solid fundamentals that can sustain future growth.
So, if you’re looking to invest $1,000, here’s an ultimate growth stock to buy right now.
The ultimate TSX growth stock
With its stellar revenue and earnings growth rate, high ROE, and solid growth potential, goeasy (TSX:GSY) is the ultimate growth stock to consider now. The company is Canada’s leading non-prime consumer lender, offering leasing and lending products.
goeasy’s wide variety of financial products and services, including unsecured and secured installment loans, and solid credit underwriting capabilities consistently drive its financials and share price. Over the past decade, goeasy’s revenue has grown at a CAGR of 19%, while its adjusted per-share earnings have surged at an even more impressive 28.6% CAGR. More recently, in the past five years, goeasy’s revenue growth has accelerated, posting a CAGR of 20.2%, with earnings maintaining the momentum and growing at 28.7% CAGR. These numbers reflect goeasy’s ability to scale profitability.
Thanks to its solid financial performance, goeasy stock has grown at a CAGR of 27.1%, delivering a capital gain of about 1,006%. Besides stellar capital gains, goeasy has steadily increased its dividend payments during this time.
Further enhancing the company’s investment appeal is its consistently high ROE. Over the past five years, goeasy has delivered an average ROE of 26.4%, reflecting the company’s efficient use of shareholder capital to generate profits.
Why buy goeasy stock right now?
While goeasy has delivered exceptional returns, there are three compelling reasons to buy its stock right now. The momentum in goeasy’s financials is likely to persist, with the company’s robust product range, omnichannel offerings, and geographic expansion all contributing to its growth trajectory. Additionally, the diversified sources of funding should continue to support an expanding loan portfolio, further bolstering top-line growth.
Further, goeasy’s focus on higher-quality loan originations and solid credit performance could lead to double-digit growth in its top and bottom lines. Moreover, the subprime lender’s emphasis on credit adjustments and an improved product mix will boost its margins and overall profitability.
The company’s steady credit portfolio is another growth catalyst. With credit tightening and a higher proportion of secured loans, goeasy’s credit losses will likely remain stable, a sign of its strong risk management. Additionally, operating leverage and productivity improvements should continue to enhance efficiency and drive its bottom line.
Besides high growth, goeasy will likely enhance its shareholder value through higher dividend payments. Moreover, goeasy stock offers significant value near the current price levels. GSY currently trades at a forward price-to-earnings (P/E) multiple of 8.8, which is attractive given the company’s potential for double-digit earnings growth, high return on equity (ROE), and a dividend yield of 2.8%. This combination of growth potential, income, and value makes goeasy stock an appealing option for long-term investors.
