For long-term investors, the recipe for financial security often comes down to finding the right mix of growth, income, and value. A company that consistently delivers solid earnings, rewards shareholders with steady dividends, and still trades at an attractive price not only has the potential to strengthen your portfolio but also your financial future.
That’s why a closer look at this Canadian financial services company is worthwhile. The business stands out for its solid fundamentals, consistent dividend growth, and strong growth potential. Furthermore, at its current valuation, this Canadian stock appears undervalued, offering an attractive entry point for investors seeking to secure their financial future. Let’s take a closer look.
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A high-growth TSX stock offering income and value
The TSX has very few stocks offering a compelling mix of growth, income, and value, and goeasy (TSX:GSY) is one among them. This financial services provider has been rewarding long-term shareholders with strong capital appreciation and reliable dividend growth.
goeasy specializes in non-prime leasing and lending services, catering to a segment of the market often overlooked by large and traditional lenders. That niche has led to strong growth. Over the past five years, the financial services company’s top line has climbed at a compound annual growth rate (CAGR) of 22.7%, while earnings have grown at a nearly identical 23% CAGR. This combination of rising sales and profitability has translated into solid capital gains for investors. Notably, goeasy shares have soared more than 277% in the past five years, compounding at over 30% annually.
In addition to delivering above-average returns, goeasy has returned significant cash to its shareholders via dividends. The subprime lender has paid dividends for 21 consecutive years and has raised its distributions for 11 straight years.
Further, goeasy stock is trading at a compelling valuation. Despite its robust performance and reliable growth, goeasy trades at just 10.3 times its expected earnings for the next 12 months. This appears low considering the company’s strong earnings growth potential and consistent dividend growth.
goeasy is well-positioned for sustained momentum
goeasy appears well-positioned to maintain its growth trajectory, with several structural advantages working in its favour. As a leader in Canada’s subprime lending space, the company continues to see strong loan demand, which is driving its financials.
Looking forward, goeasy anticipates that its loan portfolio will expand to between $7.35 billion and $7.75 billion by 2027, which is expected to provide a meaningful boost to revenue. While the average yield on loans is projected to ease slightly, this shift reflects a calculated move toward secured lending. These loans typically generate lower interest income, but they carry less credit risk and improve the stability of long-term earnings.
goeasy is also likely to benefit from its diversified funding base and its strategy of broadening both product offerings and distribution channels, including expansion into new geographic markets. The leverage from higher sales, strong underwriting practices, steady credit performance, and an emphasis on operational efficiency will help the company deliver solid profitability.
All considered, goeasy is well-positioned to maintain a double-digit revenue and earnings growth rate to support its dividend payouts and share price.
The bottom line for investors
With its strong track record of growth, reliable dividends, and attractive valuation, goeasy is one of the most compelling stocks on the TSX today, offering a potential opportunity to secure your future.
