Every so often, the TSX offers long-term investors the chance to buy a high-quality stock at a price that you simply can’t ignore. It usually happens when short-term factors, market sentiment, or broader economic worries drag a stock down far more than its fundamentals deserve. And for patient investors who can see the big picture, those moments are often the difference between an average return and a spectacular one.
Although sometimes it may feel like it, you don’t always have to chase risky turnaround plays or speculative stocks to find a bargain.
In fact, when you’re patient, some of the best deals show up in companies that already have stable earnings, strong competitive positions, and proven track records of execution. So, when those stocks fall out of favour temporarily, that’s when you need to seize the opportunity.
The TSX is full of good companies, but only a handful are worth buying on weakness. The goal is to find businesses with durable cash flow, manageable debt, and a clear path for growth. If the stock is trading below its typical valuation and is being mispriced due to short-term noise, that’s the type of opportunity that rarely lasts long.
So, if you’re looking for a TSX stock to buy now that you can get for a steal, here’s why I’d strongly recommend investors consider goeasy (TSX:GSY).
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One of the best dividend growth stocks to buy on the TSX
Although many investors know goeasy as a growth stock with an impressive rally over the last few years, it’s actually also one of the top dividend growth stocks you can buy on the TSX. And right now, its pullback has created one of the best opportunities investors have seen in years.
goeasy is a leader in non-prime consumer lending, with a long multi-year track record of strong loan growth, rising revenue, consistent profitability, and impressive returns on equity. But over the last few months, a combination of short-term issues has pushed the share price far below what the fundamentals suggest.
The recent pressure started when a short-seller report surfaced, raising concerns about delinquencies and credit losses. goeasy quickly denied the allegations, calling the claims misleading, and management reiterated confidence in the strength of its loan book. Still, the market reacted sharply, and the stock declined as sentiment shifted.
Then, when the company posted its latest quarterly results, revenue remained strong, but earnings came in slightly below expectations due to elevated credit provisioning. Management acknowledged a cautious macro backdrop and highlighted that credit conditions have tightened, especially for unsecured borrowers. This more conservative tone, along with higher allowances for credit losses, created further selling pressure as investors focused on near-term earnings volatility.
Therefore, it’s understandable why goeasy’s stock has sold off. However, how far it has fallen is not justifiable. This is exactly where the opportunity lies. Analysts note that goeasy continues to grow loans at a healthy pace, maintains stable charge-off rates, and is still on track for long-term expansion, even if the next few quarters are noisier than usual.
Furthermore, although goeasy generated $4.12 of adjusted earnings per share in the third quarter, compared to consensus expectations of $4.68, over the last 12 months, it has still generated more than $16 in adjusted EPS, which is more than enough to cover its $5.84 annual dividend.
So, while goeasy trades at just 6.9 times forward earnings and offers a current yield of 4.3%, it’s easily one of the best TSX stocks to buy now.
