I’d Put My Entire TFSA Into This 3.4% Dividend Stock

If you’ve thought about filling your entire Tax-Free Savings Account (TFSA) with one dividend stock, it pays to choose wisely. A high-yielding dividend might be enticing, but it’s essential to look beyond the yield. goeasy (TSX:GSY) offers a dividend of roughly $5.84 per share, translating to a yield of around 3.4% at writing, and does so with a well-covered payout and a growing business. But is it wise to put your entire TFSA in it? Let’s dig into what makes goeasy stand out, and what might give investors pause.

Getting goeasy

goeasy is in the business of providing financial products to non-prime Canadians. Its services include home furnishings rent-to-own through easyhome and small loans via easyfinancial. The dividend stock completed its first quarter of 2025 with revenue of $392 million, up 10% from $357 million a year earlier. It grew its loan portfolio by 24%, reaching $4.79 billion. Operating income climbed to $145 million, an improvement from $138 million a year ago, and adjusted operating income was $148 million.

Digging deeper into profitability, goeasy posted net income of $39.4 million, or $2.32 per diluted share, though that was down from $58.9 million, or $3.40 per share, in the first quarter (Q1) of 2024. The drop reflected higher loan-loss provisions and a shift in accounting mark-to-market items. Still, adjusted net income held steady at $60 million, or $3.53 per share, just 9% lower compared to the prior year.

That kind of resilience led management to declare its 95th consecutive quarter of profitability. goeasy also raised its dividend for the 11th straight year, pointing to a long-term focus on returning capital. New funding capacity of $2 billion gives the company flexibility to expand further.

Considerations

On the surface, it’s a strong story. A diversified income stream, regular dividend, and history of profitability make for a persuasive case. And while the 3.4% yield may not top the charts, it’s covered by earnings, a payout ratio sits around 32%, leaving ample cushion.

But there are a few caution flags. First is credit risk. goeasy lends to consumers who have less-than-prime credit. That exposure means rising interest rates or weaker economic conditions could lead to higher default rates. While net charge-offs actually eased slightly to 8.9% from 9.1% a year ago, the base remains elevated. That’s not trivial if an economic slowdown hits.

Second is the cost of borrowing. goeasy recently locked in US$400 million of senior notes at 7.375% before currency swap. That’s a hefty cost of capital. If interest rates stay high, servicing that debt could weigh on profitability. Third, earnings volatility. While adjusted earnings per share (EPS) landed at $3.53, unadjusted EPS fell significantly. That shows the business is sensitive to accounting shifts, credit provisions, or one-time items.

Finally, there’s concentration risk. Even with multiple lines of business, it’s still a single dividend stock in consumer finance. If regulatory changes or competitive pressures hit the non-prime market, the impact could ripple through earnings and dividend safety.

Bottom line

So, should you put your whole TFSA into goeasy? It might make sense as a core holding. The dividend alone is attractive, and the business model shows strength. But every investor should ask whether they’re comfortable with the credit risk, debt cost, and earnings volatility.

For many, it might prove wiser to hold goeasy as a part of a diversified portfolio. Consider blending it with other sectors, perhaps utilities, real estate, or big banks. That way, you benefit from the yield and growth potential without putting all your eggs in one basket. And right now, even $7,000 could earn ample income!

In short, goeasy offers a solid dividend backed by predictable cash flow and a growing customer base. But it’s no sure thing. Before committing your entire TFSA, weigh the risks. A balanced approach could deliver income and peace of mind — two things that are often worth more than yield alone.