The broader equity market has made a strong comeback, with many Canadian stocks posting impressive gains. As recession worries begin to fade, investor confidence is rising, helping drive the market upward. Despite the rally, some stocks still offer compelling value at their current prices.
These undervalued stocks present an excellent opportunity for long-term growth. Since they’re trading below their intrinsic worth, there’s real potential for meaningful capital appreciation as the market continues to recover.
If you’re looking to invest $500 right now, here is an ultimate value stock to buy right now.
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The ultimate Canadian value stock
If you’re looking for an ultimate value stock that combines consistent growth with attractive income potential, consider adding goeasy (TSX:GSY) to your portfolio. This Canadian financial services firm specializes in non-prime consumer lending and has been delivering solid growth.
Over the past five years, goeasy has delivered impressive financial performance. As of March 31, 2025, goeasy’s revenue grew at a compound annual growth rate (CAGR) of 19.6%. Furthermore, its earnings per share (EPS) have climbed at a CAGR of 25.8% during the same period, highlighting efficient cost management and strong profitability.
goeasy’s financial strength has translated into outstanding stock performance. Over the last five years, goeasy shares have surged by about 269%, delivering a CAGR of nearly 30%, handily beating the broader market. Goeasy also offers a steady income. The financial services company has paid dividends consistently for 21 years and raised its payout for 11 consecutive years. Currently, it pays a quarterly dividend of $1.46 per share, yielding 3.4%.
Despite this strong performance, goeasy stock still trades at a surprisingly low valuation. As of its closing price on July 9, the stock was trading at just nine times its projected earnings over the next 12 months (NTM price-to-earnings). For a company with strong double-digit earnings growth, a healthy dividend yield, and an expected return on equity of around 23%, that’s a compelling bargain.
Here’s what could push goeasy stock higher
Besides its compelling valuation, goeasy has significant catalysts that will drive its financial performance and share price. As one of Canada’s leading subprime lenders, goeasy is well-positioned to capitalize on the large non-prime lending market in Canada.
Its leadership in a large and underserved segment of the market, high-quality loan book, and robust customer acquisition capabilities position it well to rapidly grow its top line. Moreover, benefits from high revenue and solid underwriting capabilities set the stage for significant earnings growth.
The financial services company anticipates its consumer loan portfolio will expand to $7.35 billion to $7.75 billion by 2027. This growth is expected to be driven by strong demand for credit in the subprime space, where goeasy already has a competitive advantage.
To support this momentum, goeasy is diversifying its product offerings and widening its distribution channels, ensuring that it can reach more borrowers through more touchpoints. At the same time, goeasy is enhancing its funding sources, ensuring that capital is available to meet rising loan demand.
A key component of goeasy’s strategy is its implementation of risk-based pricing. This approach enables it to offer more personalized loan rates, making borrowing more accessible while maintaining its margins. While this could slightly compress yields in the short term, it’s a strategic move aimed at increasing customer retention and building long-term value.
In summary, goeasy is well-positioned to deliver double-digit revenue growth, maintain stable credit performance, and drive efficiency. These drivers will lead to solid earnings growth and support higher dividend payments.
The bottom line
goeasy offers compelling value near the current market price. It has a well-established business with a proven ability to grow earnings, a shareholder-friendly dividend policy, and a valuation that still leaves room for upside.
