Stocks offering growth, income, and value are some of the smartest investments for creating wealth in the long term. These are the companies that are most likely to deliver above-average returns. Against this background, let’s look at one of the smartest Canadian stocks to buy with $2,000 right now.
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Top TSX stock offering growth, income, and value
Investors looking to boost their portfolio with the smartest stock could consider goeasy (TSX:GSY). The company is growing at a solid pace. Moreover, this growth stock has consistently rewarded its shareholders with higher dividend payments, which reflects its solid fundamentals and ability to consistently grow its earnings in all market conditions.
Given its solid financials, goeasy stock has grown at a CAGR of over 41% in the last five years, delivering capital gains of about 462%.
Despite the rally, goeasy stock trades cheaply on the valuation front, presenting a solid buying opportunity near the current market price. Let’s dig deeper.
goeasy set to grow rapidly
goeasy has consistently delivered impressive sales and increased its earnings at a double-digit rate. For instance, this subprime lender’s top line has increased at a compound annual growth rate (CAGR) of 20.1% in the last five years. Moreover, its earnings per share (EPS) grew at a CAGR of 28.1% during this period.
Looking ahead, the momentum in goeasy’s business will likely sustain driven by the continued expansion of its gross consumer loan portfolio and solid yield on these loans. goeasy is focusing on expanding its product range, developing its distribution channels, and diversifying its funding sources to capitalize on Canada’s large subprime lending market. This will drive loan originations and its top line.
Additionally, goeasy is leveraging risk-based pricing to optimize the cost of borrowing for its customers. While this approach may lead to slight pressure on loan yields, it is expected to stimulate demand, foster long-term customer relationships, and ultimately enhance profit margins. By balancing competitive pricing and profitability, goeasy is strengthening its market position while ensuring sustainable growth.
With rising revenue, stable credit performance, and operational efficiencies, goeasy is well-positioned to continue expanding its earnings, which will likely increase at a double-digit rate. This will help drive its dividend payouts and share price.
goeasy to return significant cash
goeasy’s solid earnings have enabled it to consistently increase its dividend and return higher cash to its shareholders. The financial services company has paid dividends for 21 years. Moreover, it has increased its dividend for 11 consecutive years.
Most recently, goeasy boosted investor returns by raising its annual dividend by 25% to $5.84 per share. Further, it has increased its dividend by 121% since 2021, reflecting the company’s commitment to rewarding its shareholders.
The company’s stellar dividend payments and growth history, expanding margins, and solid earnings suggest that goeasy will continue to enhance its shareholder value through higher payouts.
goeasy stock: Undervalued with room to run
While goeasy is poised to deliver solid growth and return higher cash, its stock appears attractive on the valuation front. Near its current levels, goeasy stock is trading at a forward price-to-earnings (P/E) ratio of just 8.1 – a notably low multiple, given its robust double-digit earnings growth. This undervaluation becomes even more compelling when considering its healthy dividend yield of 3.7% and impressive return on equity (ROE) of 26.4%.
The bottom line
goeasy’s leadership in the subprime lending space, consistent earnings growth, shareholder-friendly dividend policy, and compelling valuation make it the smartest stock to buy now for creating wealth in the long term.
