The current market environment, where delinquencies are rising, may not bode well for non-prime lenders like goeasy (TSX:GSY). Its stock price fell 18.5% from January 24 to date even after the company reported record 2024 earnings, revised its 2025-2027 outlook upwards, and declared a quarterly dividend per share of $1.46, up 24.8% from $1.17 last quarter.
The threat of U.S. tariffs creates uncertainty around inflation. However, the Bank of Canada’s interest rate cuts will try to support consumer spending by injecting more money into the economy. While companies with high exposure to exports face a bigger risk from tariffs, goeasy only caters to select Canadian markets. Its conservative approach to expansion has helped it sustain the 2008 Financial crisis.
Over the years, goeasy has diversified its revenue streams to include home equity loans, automotive, and point-of-sale retail loans. However, unsecured lending still forms a significant part of its revenue.
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What does 2025 have in store for goeasy?
The year 2025 brings with it two new changes:
- The legislation on a maximum allowable interest rate of 35% became effective on January 1, 2025.
- goeasy appointed its first external chief executive officer in 25 years. Dan Rees joins goeasy from Scotiabank.
Management change generally does not bode well with investors in the short term until the new management shows outcomes. Also, the interest rate cap could slightly reduce goeasy’s customer base, to whom it charges interest rates in the 9.9-46.9% range. However, the company has already been improving the credit score of its customers and reducing its yield. Hence, most of its borrowers are in the 35% range.
For 2025, goeasy expects its loan receivables to increase to $5.4-$5.7 billion, a $100 million upside from the previous guidance. It has lowered its 2025 estimates for total yield from consumer loans to 31-32.5% from the previous 31.25-33.25% to reflect the impact of the new rate cap.
All these factors will keep goeasy’s share price volatile in the short term. However, the long-term returns are still attractive.
A 3.27% dividend yield today
goeasy is a growth stock that also pays dividends. Since the company has been growing its business and retained earnings, it also increased its dividend per share by a strong double-digit, as visible from the table below.
| Year | goeasy Annual Dividend Per Share | Dividend Growth | Total Dividend Income |
| 2025 | $5.84 | 24.8% | $3,141.92 |
| 2024 | $4.68 | 21.9% | $2,517.84 |
| 2023 | $3.84 | 5.5% | $2,065.92 |
| 2022 | $3.64 | 37.9% | $1,958.32 |
| 2021 | $2.64 | 46.7% | $1,420.32 |
| 2020 | $1.80 | 16.1% | $968.40 |
| 2019 | $1.55 | 72.2% | $833.90 |
| 2018 | $0.90 | 25.0% | $484.20 |
| 2017 | $0.72 | 44.0% | $387.36 |
| 2016 | $0.50 | 25.0% | $269.00 |
Had you invested $10,000 in January 2016, when the goeasy share price was $18.57 per share, you could have bought 538 shares. At that time, its annual dividend per share of $0.50 gave a 2.69% yield. However, the company kept growing its dividends to reach $5.84 per share today. Holding the stock for 10 years has increased the yield to 31.4% ($5.84 annual dividend /$18.57 share price in 2016).
Moreover, the value of these 538 shares is $84,446 (538 shares x $157 current stock price).
Hence, do not look at goeasy’s 3.27% dividend yield today. Instead, look at the annual dividend growth of more than 20% and the share price growth simultaneously.
Is now a good time to buy goeasy stock?
goeasy stock is trading near its 52-week low, creating an opportunity to buy the dip. This is a stock to buy and forget. Unless there is a major setback that affects the company’s ability to repay its debt, the stock is worth holding for the long term. So far, the company’s credit risk model and Canadian consumer’s strong obligation to repay debts due to recourse laws keep the risk in check.
goeasy’s dividend-growth rate will likely slow down as lending yields normalize. However, even a 15-18% dividend growth can generate strong passive income in the long term.
