Kalkine Media - Evaluating dividend stocks is often simpler than assessing growth stocks because dividend payers primarily require scrutiny of their financial health to maintain consistent dividend-based returns. Although dividend stocks are not immune to market forces, sticking to relatively safer options like dividend aristocrats with long histories of dividend growth can mitigate risks.
One such example is goeasy (TSX:GSY) (TSX:GSY). Despite being a newer entrant to the dividend aristocrat group, with just an eight-year streak of dividend growth, its significant dividend increases make it attractive.
goeasy dividends
While dividends might not be the first consideration for goeasy investors, the company has delivered impressive price appreciation of 266% over the last five years, with dividends included, enhancing returns by 320%. Although its yield typically remains modest due to rapid growth, the company has consistently increased dividends, making its yield more appealing than many growth stocks. Currently, the yield stands at 2.7%.
The company's financial sustainability is another reason to consider its dividends. Its payout ratio has remained relatively conservative, even compared to Canadian bank stocks, known for their stability. Over the past decade, the payout ratio peaked at 43%.
Moreover, goeasy's dividend growth is noteworthy. The recent quarterly dividend announcement of about $1.1700 per share reflects a 21.8% increase from the previous year, surpassing the growth rate of many dividend aristocrats.
goeasy stock
Both the dividends and growth potential make goeasy an attractive investment option. The company boasts healthy financials and a broad national reach, driving significant organic growth. Its role as one of Canada's leading alternative financial institutions, serving a large underserved market of individuals with poor credit, positions it well for long-term growth.
In conclusion, while goeasy stock has already experienced considerable growth, it remains modestly discounted, offering investors an opportunity to benefit from both a good yield and potential capital appreciation as the company continues its growth trajectory.