The Canadian equity markets have witnessed substantial buying this year, with the S&P/TSX Composite Index making a new high yesterday. The index is up 23.5% year to date. Amid improving investor sentiment, let’s explore two stocks that offer strong potential for significant capital gains while also providing consistent dividend payouts.
Source: Getty Images
goeasy
goeasy (TSX:GSY) would be an ideal investment for investors seeking capital gains and consistent dividend payouts, given its solid underlying business, healthy growth prospects, and a history of consistent dividend growth. After beginning its consumer lending services in 2006, the subprime lender has grown its loan portfolio to $5.1 billion as of the end of the second quarter of 2025. Despite its strong growth, the company has acquired just around 2% of the Canadian $231 billion subprime market. Therefore, the company has a substantial scope for expansion.
With its comprehensive suite of financial products and services targeting the full spectrum of the non-prime credit market, along with a robust omnichannel lending model, goeasy is well-positioned to continue expanding its loan portfolio. Meanwhile, the company’s management projects its loan portfolio to be between $7.35 billion and $7.75 billion in 2027, with the midpoint representing a 48% increase from its current levels. Amid these expansions, its top line could grow at an 11.4% CAGR (compound annual growth rate) through 2027, while improving its operating margin to 43%.
goeasy has also rewarded its shareholders by raising its dividend at a 29.5% CAGR for the previous 11 years and currently offers a healthy dividend yield of 3.54%. However, the company has been under pressure over the last few days amid the release of Jehoshaphat Research’s report, which blamed goeasy for improperly deferring the reporting of its credit losses and failing to disclose significant delinquencies. Although goeasy has dismissed these allegations, calling the report false and malicious, the company has lost over 23% of its stock value compared to its 52-week high. Meanwhile, its NTM (next-12-month) price-to-earnings multiple has declined to 8.2, making it an attractive buy.
Waste Connections
Another stock that could appeal to investors seeking both capital appreciation and steady dividend income is Waste Connections (TSX:WCN), which has generated impressive returns of 456% over the past decade, translating to an annualized growth rate of 18.7%. The waste management company has expanded its business through organic growth and strategic acquisitions, boosting its financial performance and stock price. It has also rewarded its shareholders through 14 consecutive years of double-digit dividend growth. Although its dividend yield is relatively modest at 0.7%, investors can still benefit from the company’s consistent track record of dividend growth.
Meanwhile, WCN is continuing its expansion and has acquired several assets this year, which could contribute $200 million to its annualized revenue. Given its healthy financial profile and free cash flow generation, the company’s management is optimistic about continuing its acquisitions. Additionally, leveraging technological innovations, stronger employee engagement, and enhancing safety standards could help drive its profitability in the coming quarters. Given the essential nature of its business and robust growth prospects, I believe WCN is well-positioned to sustain strong financial performance in the coming quarters, which will support both its stock price appreciation and steady dividend payouts.
