If you’re looking for a perfect buy-and-hold stock for the next 30 years, goeasy (TSX:GSY) could be a compelling option. Over the past decade, it has proven to be one of the most rewarding names on the TSX, offering impressive capital appreciation and consistent dividend growth. Its blend of shareholder value creation through price gains and rising payouts makes it a top choice for long-term investors.
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goeasy: A leader in non-prime lending
goeasy operates across Canada through its brands, including easyhome, easyfinancial, and LendCare. These businesses cater to the non-prime lending market, offering personal loans, home equity installment loans, point-of-sale financing with retail partners, and lease-to-own solutions.
The financial services company’s focus on underserved borrowers positions it as a leader in a large, growing market. Its operational efficiency and wide product range have been key drivers of its success.
Over the past five years, goeasy has delivered robust growth across its financial metrics. Its top line has increased at a compound annual growth rate (CAGR) of 19.6%. This reflects strong demand for products and the expansion of omnichannel offerings. At the same time, it has maintained strong underwriting standards and a solid balance sheet, resulting in consistent earnings expansion.
On the profitability front, goeasy has achieved a 25.8% CAGR in earnings over the same period and posted an average return on equity (ROE) of 26.4%. This financial strength has translated into exceptional stock performance, with the share price soaring more than 275% in five years, growing at a CAGR of over 30%.
goeasy’s growth story isn’t over
What makes goeasy particularly compelling is that its growth story is far from over. The company is still in the early phases of expanding its product offerings, distribution channels, and geographic reach. These initiatives lay the groundwork for continued growth in the years ahead.
With its strong fundamentals, a growing dividend, and an attractive valuation, goeasy is a solid long-term investment. As the business scales further, shareholders could benefit from both income and capital gains, making it a strong candidate for any long-term portfolio.
Moreover, the current valuation presents an attractive entry point, highlighting a compelling opportunity to capitalize on potential future gains.
Factors driving goeasy’s financials
goeasy is on track to deliver double-digit growth, supported by an expanding customer base, a high-quality loan book, and strong underwriting practices that maintain steady credit performance.
Looking ahead, goeasy is targeting a consumer loan portfolio between $7.35 billion and $7.75 billion by 2027. Its strategic move to diversify its lending products, broaden distribution channels, and strengthen funding sources will help drive loan originations and expand its portfolio. Its risk-based pricing model is expected to attract more borrowers, enhance customer retention, and reduce credit risk.
The financial services company’s earnings are expected to continue growing rapidly, thanks to rising revenue and cost efficiency. goeasy continues to invest in technology, aiming to automate workflows and leverage artificial intelligence to boost productivity and reduce expenses as it scales its operations.
It has been rewarding shareholders, having paid dividends for 21 consecutive years. Impressively, it has increased its dividend for the past 11 years. This trend will likely continue given its strong earnings momentum.
Further, goeasy remains attractively priced. As of July 21, the stock traded at a forward price-to-earnings ratio of just 9.2, well below what one might expect for a company with such solid double-digit earnings growth.
Overall, for investors seeking a combination of growth, value, and income for the long term, goeasy is a compelling investment.
