The Canadian stock market is often referenced for its heavy weighting in energy and materials equities. However, the largest sector on the S&P/TSX Composite Index remains financials. Predictably, the sector is dominated by the Canadian Big Six banks, especially Royal Bank and TD Bank, the two largest equities on the Toronto Stock Exchange (TSX) by market capitalization. However, investors would do well to look outside the big banks in this sector on occasion.
Today, I want to look at one of my favourite financial and growth stocks available to Canadians: goeasy (TSX:GSY).
In this article, I want to explore this growth stock’s recent performance and look at how much a $5,000 investment in 2020 would be worth in the present. Let’s dive in.
How has this growth stock performed over the past year?
goeasy stock has dipped marginally month over month as of close on Tuesday, August 22. However, its shares are still up 17% so far in 2023. The growth stock is still down 3.6% in the year-over-year period. Investors can see more of its recent and past performances with the interactive price chart below.
Should investors be happy with goeasy’s recent earnings?
Before we look at goeasy’s performance over the course of this young decade, we should peek at its recent results. The company unveiled its second-quarter (Q2) fiscal 2023 earnings on August 9. Loan originations increased 9% year over year to $667 million. goeasy benefited from strong demand for loans, illustrated by a record amount of credit applications. Indeed, credit applications were up 25% in the year-over-year period. This contributed to a 35% increase in its loan portfolio to $3.20 billion.
This company delivered revenue growth of 20% to $303 million in Q2 2023. Adjusted operating income climbed 23% year over year to $114 million. Moreover, adjusted net income increased 20% to a record $56.0 million. Adjusted diluted earnings per share (EPS) rose 16% to $3.28.
goeasy has continued to impress with its growth potential. This represented the 88th straight quarter of positive net income. Moreover, it was the 53rd consecutive quarter of same-store revenue growth at its easyfinancial and easyhome locations. In the first six months of fiscal 2023, goeasy delivered loan originations growth of 16% to $1.28 billion, and revenues rose 22% to a record $590 million.
Here’s why I’m excited to hold this growth stock for the long haul!
The company continues to project strong loan, revenue, and earnings growth through fiscal 2025. That should maintain investor interest through the first half of this decade. Better yet, goeasy last announced a quarterly dividend of $0.96 per share. That represents a 3% yield. The growth stock has delivered nearly a decade of dividend growth. That means goeasy is a Dividend Aristocrat. This is a nice bonus for investors.
Shares of goeasy closed at $66.54 on August 19, 2020. At the time, we could snatch up 75 shares of this growth stock for a purchase price of $4,990.50. goeasy stock closed at $124.14 on Tuesday, August 22. Those same 75 shares would be worth $9,310.50 today. This means investors will have gobbled up over $4,000 in capital growth over the past three years.
