What ultimately drives long-term investment returns? It comes down to two powerful forces: income along the way and capital appreciation over time.
The most compelling investments combine both — offering a growing stream of income today and the potential for outsized gains as the business expands and its valuation normalizes.
One top Canadian stock fits that description remarkably well. While it’s not without risk, its long-term track record, current valuation, and shareholder-friendly policies suggest it could genuinely be one of the best investments of the decade.
Source: Getty Images
A high-risk business with exceptional long-term results
goeasy (TSX: GSY) is not a stock for the faint of heart. Its share price can be volatile, and it often experiences sharp drawdowns during periods of economic uncertainty or downturns.
However, history shows that investors who buy during these sell-offs — when sentiment is weak, but fundamentals remain intact — have been rewarded handsomely.
After a roughly 36% decline from its 52-week high, goeasy now trades at about a 28% discount to its long-term average valuation. That discount is meaningful, especially considering what the company has delivered over the last decade.
Despite recent weakness, goeasy has been a 9.5-bagger over the past 10 years, turning a $10,000 investment into approximately $95,470. That equates to an impressive compound annual growth rate of around 25%.
Those are not the results of a lucky cycle. They reflect a business model that has consistently grown through different economic environments.
A scalable growth engine built for non-prime lending
goeasy operates in the non-prime lending market, serving Canadians who are unable to borrow from traditional banks. While that may sound risky — and it is — the company has built a diversified and increasingly sophisticated platform to manage that risk.
Its growth strategy spans multiple lending products, including secured auto loans, home equity loans, personal loans, and leasing. It also benefits from an omnichannel distribution model, combining physical locations, digital platforms, and a merchant network. Importantly, management continues to shift toward higher-margin secured lending while investing heavily in data analytics and underwriting technology to improve credit quality.
Because of its business model, goeasy carries a non-investment-grade S&P credit rating of BB-, which causes some investors to avoid the stock entirely. That skepticism, however, is precisely what creates opportunity. When bought at a meaningful discount and held patiently, the stock has historically delivered exceptional recoveries.
A rare combination of growth and income
One of goeasy’s most underappreciated strengths is its dividend growth. The company has increased its dividend for roughly 11 consecutive years and boasts a staggering 10-year dividend-growth rate of 30.7%. Over the past decade, it delivered double-digit dividend increases in every year but one — an extraordinary level of consistency.
At today’s depressed price of around $134 per share, the stock offers a dividend yield near 4.4%, which is unusually high for a company expected to grow at a double-digit pace for the long haul. With a trailing-12-month payout ratio of just 36%, the dividend appears well protected and positioned for future growth.
For investors with a high risk tolerance and a long-term horizon, goeasy could meaningfully enhance portfolio returns. If the company continues growing at a double-digit rate, annualized returns north of 20% over the next five years are not out of the question.
Investor takeaway
goeasy is volatile, misunderstood, and undeniably risky — but that’s exactly why the opportunity exists. Trading well below its historical valuation, supported by strong growth fundamentals and a rapidly rising dividend, it has the potential to be one of the most rewarding Canadian investments of the decade for patient, long-term investors.
