Finding a stock that offers income, growth, and a reasonable valuation isn’t easy. But some small Canadian companies are quietly building strong businesses while still trading outside the spotlight – making them look undervalued. Propel Holdings (TSX: PRL) is one of them. In this article, I’ll explain why this dividend-paying fintech stock could be worth buying and holding for the long term.
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An undervalued Canadian dividend stock to consider
If you don’t know it already, Propel Holdings mainly helps underserved consumers access credit through brands like Fora Credit, CreditFresh, MoneyKey, QuidMarket, and Propel Bank. Its artificial intelligence (AI)-powered platform evaluates borrowers more broadly than traditional credit scores, helping it serve customers who may not get support from regular banks.
That model is already working at scale. Propel’s platform has helped consumers access nearly 2 million loans and lines of credit, representing almost US$3 billion in credit.
After slipping by around 18% over the last year, its stock currently trades at $22.06 per share with a market cap of around $870 million. At this market price, it offers a 4.1% dividend yield.
In 2025, its revenue jumped 31% year-over-year (YoY) to a record US$589.8 million. Similarly, its net profit for the year rose 28% YoY to US$59.5 million, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) increased 7% to US$130.3 million.
A strong finish to 2025
Propel’s fourth quarter had some pressure on profitability, but its top-line growth remained impressive. During the quarter, its revenue rose 21% YoY to US$155.8 million. Total originations funded increased 26% to a record US$220.9 million, while ending combined loan and advance balances rose 23% to a record US$589.5 million.
While higher credit costs, upfront provisioning, and marketing spending tied to late-quarter originations affected its quarterly profits, its management indicated that the fourth quarter likely marked the peak level of provisioning. That matters because the company entered 2026 with stronger credit trends, record balances, and a larger base for future revenue.
Dividend growth adds to the appeal
Propel is also rewarding shareholders with attractive dividends. It paid a dividend of $0.21 per share in the fourth quarter of 2025, which was 8% higher than the previous quarter. It also increased its quarterly dividend again by 7% to $0.225 per share for the first quarter of 2026.
For investors looking for dividend growth, that is a strong signal. It shows management’s confidence in the company’s earnings power and financial position.
A clear path for 2026
In 2026, Propel expects revenue of US$725 million to US$775 million, adjusted EBITDA of US$152.5 million to US$177.5 million, and net profit of US$70 million to US$90 million.
It also expects the ending combined loan and advance balances to grow 18% to 24% YoY. These targets are mainly backed by growth in North America, expansion in the U.K. through QuidMarket, Propel Bank, and further AI investments.
Foolish bottom line
Propel Holdings is not a risk-free stock as it serves consumers who can be more sensitive to economic pressure, and its credit costs could rise when conditions weaken. That showed up in the fourth quarter.
Still, Propel’s long-term outlook looks promising as it has strong revenue growth, rising dividends, expanding capital support, and a growing AI-powered lending platform. That’s why, for patient investors seeking an undervalued Canadian dividend growth stock, Propel Holdings could be worth buying and holding for years.
