Choosing a single stock to invest in is akin to selecting the perfect pair of shoes. You want something that fits well, is durable, and suits your style. It’s essential to consider factors such as the company’s financial health, growth prospects, and industry position, as well as how it aligns with your investment goals. With these considerations in mind, let’s delve into why goeasy (TSX:GSY) might be a compelling choice for your portfolio.
Why goeasy
Goeasy has been making waves in the financial services sector, particularly in consumer lending. The company reported record-breaking results in the third quarter of 2024, with loan originations reaching $839 million, a 16% increase from the same period in 2023. This surge in lending activity propelled their total loan portfolio to $4.4 billion, marking 28% year-over-year growth. Such robust performance underscores goeasy’s effective business model and its ability to meet consumer demand.
Financially, goeasy showcases impressive metrics. The company achieved revenue of $383 million in Q3 2024, up 19% from the previous year. Operating income also saw a significant rise, reaching $160 million, a 26% increase from Q3 2023. These figures highlight the company’s operational efficiency and capacity to generate substantial profits.
Earnings per share (EPS) is a critical indicator for investors, and goeasy stock doesn’t disappoint. The diluted EPS for Q3 2024 was $4.88, up from $3.87 in the same quarter the previous year. This upward trajectory in EPS reflects the company’s growing profitability and commitment to delivering value to shareholders.
Future focus
Looking ahead, goeasy’s future appears promising. The company has been expanding its product offerings and distribution channels, positioning itself for sustained growth. Analysts have set a consensus 12-month price target of $219.89 for GSY, suggesting potential upside from its current trading price. This optimism is further supported by the company’s strategic initiatives and track record of consistent performance.
In terms of valuation, goeasy stock maintains a reasonable price-to-earnings (P/E) ratio. The trailing P/E stands at 11.8, while the forward P/E is 10. These figures indicate that the stock is priced attractively relative to its earnings, offering potential value for investors seeking growth at a reasonable price. Dividends are another aspect where goeasy shines. The company has a history of paying dividends, with a forward annual dividend rate of $4.68 per share, yielding approximately 2.4%. This consistent dividend payment reflects goeasy’s financial stability and commitment to returning capital to shareholders.
Foolish takeaway
When considering an investment in goeasy stock, it’s also important to assess the broader industry context. The consumer finance sector has been experiencing growth, and goeasy’s focus on non-prime lending positions it to capitalize on this trend. The company’s ability to manage credit risk effectively while expanding its customer base is a testament to its robust risk management practices.
So, if you’re contemplating a single stock investment, goeasy stock presents a compelling case. Its strong financial performance, growth prospects, attractive valuation, and commitment to shareholder returns make it a noteworthy candidate for a buy-and-hold strategy. As always, it’s prudent to conduct your own research and consider your individual financial situation before making investment decisions.
