The TSX has several high-quality dividend growth stocks. Their solid dividend payment, growth history, and sustainable payouts make them an attractive investment to buy and hold for decades.
However, here I’ll focus on a Canadian dividend stock that is trading incredibly cheaply and has been growing its dividend for years. While this TSX stock has corrected significantly, it has the potential to recover swiftly. Moreover, its strong revenue and earnings base will likely support future payouts.
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An incredibly cheap dividend growth stock
The broader Canadian benchmark index has maintained its upward trajectory, rising about 37% over the past year. However, goeasy (TSX:GSY), which has consistently paid and increased its dividend at a solid pace, moved in the opposite direction. Shares of this subprime lender have declined about 28% over the same period and are trading nearly 48% below the 52-week high.
Market concerns intensified after a short-seller report questioned the company’s accounting practices and highlighted potential risks within its lending model. Moreover, its Q3 earnings came under pressure due to higher allowance for credit losses and increased finance costs.
Regulatory changes have also played a role. The tightening of the federal maximum allowable interest rate has reduced the yield on certain loans, while a higher mix of secured lending has further compressed margins. Overall, these factors contributed to the stock’s underperformance.
However, the underlying business remains resilient. goeasy continues to expand its consumer loan receivables portfolio, suggesting that demand remains strong within its target borrower segment. At the same time, management’s focus on operational discipline and cost controls has helped maintain efficiency, partially offsetting the impact of rising credit provisions.
Moreover, goeasy continues to generate solid cash flow, which supports its ability to maintain and grow its dividend payments. While near-term concerns have weighed heavily on the stock, goeasy’s core fundamentals and cash-generating capacity will support its payouts.
Why buy and hold goeasy stock for decades?
goeasy has been a reliable income stock for investors as it has consistently paid dividends for more than two decades (21 years to be precise). Moreover, it has increased its dividend for 11 years in a row. Its strong dividend payment history shows the resilience of its payouts and management’s focus on returning cash to its shareholders.
Looking ahead, goeasy’s dominance in Canada’s large subprime lending market should continue to support expansion. Strong demand for non-prime consumer credit could lead to higher loan originations and a larger consumer loan portfolio, which in turn would help drive revenue growth through 2026 and beyond. The company also benefits from diversified funding sources, strength across all credit products, and an omnichannel platform.
Management expects gross consumer loan receivables to reach between $7.35 billion and $7.75 billion by 2027, up from $5.44 billion at the end of Q3 2025. Moreover, operating margins are expected to improve. As the loan book grows and profitability strengthens, it will drive its cash flow and support future payouts.
In addition, goeasy continues to focus on efficiency improvements while expanding its secured loan segment. Combined with conservative underwriting standards, these initiatives are intended to enhance the quality of earnings and reduce risk across the loan portfolio.
goeasy trades at a forward price-to-earnings ratio of around 5.9, which appears inexpensive relative to its earnings growth potential. Considering its long history of double-digit earnings expansion, strong returns on equity, and commitment to returning cash to shareholders through higher dividends, the stock looks compelling to buy and hold for decades.
