Canadian investors should look to buy and hold quality dividend stocks with a growing payout to benefit from a steady stream of passive income. In addition to consistent payouts, the best dividend stocks also boost overall returns via capital gains. In this article, I have identified one incredibly cheap TSX stock that is a top buy for value and income-seeking investors.
Valued at a market cap of $950 million, Propel Holdings (TSX: PRL) stock went public in October 2021. In the last four years, the TSX stock has returned 170% to shareholders after adjusting for dividend reinvestments.
Despite these outsized gains, the TSX dividend stock is down 43% from all-time highs, allowing you to buy the dip. Moreover, the ongoing pullback has increased the dividend yield to more than 3.5%.
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The bull case of investing in this TSX stock
In Q3 of 2025, Propel delivered record Q3 results despite a challenging macro environment. The fintech lender increased revenue by 30% year over year to US$152.1 million, while net income grew by 43% to US$15 million. The AI-powered platform attributed its stellar growth in Q3 to rapid underwriting modifications and disciplined risk management systems.
The quarter highlighted mounting strain on lower-income consumers as inflation in essential categories remained elevated above 3% year-over-year while real wage growth moderated to 3.6% for lower-income workers.
The resumption of student loan collections in the second quarter added further strain on some borrowers. Management and bank partners responded by tightening underwriting standards and targeted adjustments that prioritized returning and existing customers over new customer originations to strengthen credit quality.
Propel recently announced a strategic partnership with nationally chartered Column Bank to launch Freshline, an unsecured personal loan product targeting new underserved consumer segments and geographies not currently served by Propel’s existing brands.
The CreditFresh-branded offering launches in the first quarter of 2026, with Propel providing servicing while forward-flowing loan economics to third-party partners.
Column’s national footprint and modern banking infrastructure position the partnership to accelerate growth in the U.S. across the $2 billion in credit the company has facilitated over 14 years, serving underserved consumers.
Propel’s Canadian revenue grew by 41% year over year to record levels in Q3. The company reported its strongest-ever quarterly credit performance, validating refinements to its risk models. Monthly originations in the U.K. rose 78% to 13,500 in September, indicating successful international expansion.
Is this Canadian dividend stock undervalued?
Analysts tracking Propel stock forecast revenue to increase from US$450 million in 2024 to US$949 million in 2027. In this period, adjusted earnings per share are forecast to expand from US$1.64 to US$3.27.
Bay Street also estimates the annual dividend per share to increase from US$0.40 in 2024 to US$0.98 in 2027. It means the effective dividend yield for the Canadian stock might increase from 3.7% in 2025 to 5.6% in 2027.
Management recently approved a ninth consecutive dividend increase to US$0.84 per share annually, representing cumulative growth exceeding 120% since the 2021 IPO.
If Propel stock is priced at 10 times forward earnings, which is relatively cheap, it could return more than 100% over the next 15 months, after accounting for dividends.
