Every Canadian investor dreams of turning a modest Tax-Free Savings Account (TFSA) contribution into a tax-free jackpot. While there are no guarantees in the market, one dividend stock that’s shown serious potential over the years is goeasy (TSX:GSY). With strong fundamentals, consistent growth, and a healthy dividend, goeasy could be a game-changer for those willing to stay the course.
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About goeasy
goeasy specializes in non-prime consumer lending through its easyfinancial and easyhome divisions. It lends to Canadians who might not qualify for traditional credit but still need access to financing. This niche has allowed the company to scale rapidly and profitably.
In its latest earnings report for the first quarter (Q1) of 2025, goeasy posted revenue of $392 million, up 10% from the year before. That growth was fuelled by a 24% increase in its loan portfolio, which hit a record $4.79 billion. While the dividend stock’s diluted earnings per share (EPS) fell to $2.32 from $3.40 last year, its adjusted EPS came in at $3.53, just an 8% drop from a record quarter in 2024.
That dip in net income, which totalled $39.4 million versus $58.9 million the year before, was largely tied to higher borrowing costs. In April, goeasy issued US$400 million of senior unsecured notes due 2030, and now has approximately $2 billion in total funding capacity. That kind of liquidity sets it up well for future loan growth.
More to come
The dividend stocks loan originations came in at $677 million for the quarter, with 73% of net loan advances going to new customers. Not only is goeasy expanding its base, but it’s doing so with relatively stable credit metrics. The net charge-off rate dropped to 8.9%, down from 9.1% a year ago. In other words, it’s managing defaults even while expanding aggressively.
Another point in goeasy’s favour? Dividends. goeasy has paid dividends for 21 consecutive years and increased its dividend for 11 straight years. The quarterly dividend of $1.46 per share yields about 3.4% based on recent prices near $170.27. For income-focused TFSA users, that’s a solid return, especially when you add in capital appreciation potential.
Considerations
To be fair, goeasy isn’t without its risks. Rising interest rates have made borrowing more expensive, and the company’s weighted average interest rate on consumer loans was 28.4%, down from 30.0% a year ago. Slipping yields, combined with macroeconomic uncertainty, have some investors cautious. Still, management is taking steps to offset those headwinds through pricing and product optimization.
On the efficiency side, goeasy’s performance is holding strong. Its efficiency ratio improved to 26.1%, down from 27.4% last year. That means it’s running leaner, even with a larger business. Adjusted return on equity remains solid at 20.4%, though that too has come down from 24.6%. It’s clear that while the company is still very profitable, it’s working a bit harder for every dollar.
Bottom line
So, how could this turn your $10,000 TFSA into a tax-free goldmine? Well, goeasy has already delivered enormous returns over the past decade. And even if the pace slows, there’s a realistic path to doubling your money within five to seven years based on past growth and reinvested dividends. If you hold it longer, and the company continues to expand, those gains could compound into something substantial. Meanwhile, a $10,000 investment now could bring in $338 annually at writing!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| GSY | $172.02 | 58 | $5.84 | $338.72 | Quarterly | $9,977.16 |
In short, goeasy has built a business that meets a real need, delivers strong returns, and pays shareholders to wait. It’s not flashy. It’s not risk-free. But it has all the traits of a long-term TFSA winner. With discipline and time, that $10,000 could turn into a tidy tax-free fortune.
