A stock in free fall could either be a falling knife or an undervalued gem. Valued at a market cap of $944 million, Propel Holdings (TSX:PRL) is a TSX dividend stock down 43% from its all-time high.
The Canada-based entity is part of the cyclical lending sector and has underperformed the broader markets amid a challenging macro environment, including geopolitical tensions, rising inflation, sluggish consumer spending, and a global tariff war.
However, I think the time is ripe to add this beaten-down, undervalued stock to your watchlist in June 2026.
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The bull case for the TSX dividend stock
Propel is a Canadian-headquartered but largely U.S. and U.K.-focused financial technology company. It provides personal loans and lines of credit to the roughly 90 million consumers in North America and the United Kingdom who are underserved by traditional banks.
TransUnion data released in early 2026 confirmed what Propel has been saying for years: consumers are being pushed out of prime lending segments and into non-prime territory.
Chief Executive Officer Clive Kinross called it “a structural shift that is expanding the population of underserved consumers across our markets” on the company’s first-quarter (Q1) earnings call.
That tailwind is showing up directly in Propel’s numbers.
In Q1, total originations funded hit a record US$199.3 million, up 30% year over year. New customer originations grew nearly 40%, while revenue surged 20% to a record US$166.1 million. The credit book, or combined loan and advance balance (CLAB), grew 23% to US$592.7 million.
And critically, credit quality improved.
- Provision for loan losses fell to 45% of revenue in Q1, a significant drop from 56% in Q4 of 2025.
- Net charge-offs came in at 12.6% of average CLAB, well within management’s target range.
Propel has raised its quarterly dividend for 11 straight quarters since Q4 of 2023. The board just approved another increase, bringing the annualized payout to $0.96 per share, representing a 7% jump and a yield of over 4%.
With the dividend stock down significantly from its highs, the yield on this growing payout is now considerably more attractive than it was a year ago.
At the same time, the company is targeting roughly 50% growth in bottom-line earnings for 2026 compared to 2025. Based on Q1 performance, management said the company is tracking slightly ahead of that target.
Propel is a high-growth fintech stock
Propel launched FreshLine in partnership with Column Bank in March 2026 to serve a new, near-prime segment of the credit spectrum.
It is already expanding state by state and ahead of management’s internal volume targets. The lending-as-a-service (LaaS) program grew revenues by 114% year over year in Q1, and management expects it to approach 10% of total company revenue by Q4 of 2026.
Propel Bank, now operating out of Puerto Rico, is building out a long-term platform to expand across all 50 U.S. states.
In the United Kingdom, Propel’s QuidMarket brand is growing at more than double the pace it was running a year ago, yet management says credit performance there remains exceptionally strong.
Further acceleration in growth in the U.K. is expected as the year progresses.
Propel has spent years building proprietary data and AI-powered underwriting. That investment is now yielding real efficiency gains: higher auto-decisioning rates, better loan-per-agent productivity, and the rollout of AI voice agents to handle routine customer interactions at scale.
The Foolish takeaway
Analysts tracking Propel stock forecast revenue to increase from US$590 million in 2025 to US$926.5 million in 2027. In this period, adjusted earnings per share are projected to expand from US$1.58 to US$2.80.
If the TSX dividend stock is priced at 12 times forward earnings, which is cheap, it could double within the next 12 months.
