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Highlights
- Canadian financial services stocks attract investors as it is one of the top sectors in the country.
- The S&P/TSX Financial Index, comprising 28 Canadian companies engaged in the financial services sector, has surged by 22.4 per cent year-to-date (YTD).
- Find out more about the stock that has surged by 218 per cent in the last 12 months.
Financial services is one of the leading sectors in Canada and attracts a lot of investors. This sector is a major contributor to the country's gross domestic product (GDP) and its economic contribution drives Canada's growth.
According to the Conference Board of Canada (CBoC), the GDP growth in the finance and insurance sector outperformed the growth averages in all Canadian industries between 2011 to 2020.
The S&P/TSX Capped Financials Index, comprising 28 Canadian companies engaged in the financial services sector, has surged by 22.4 per cent year-to-date (YTD). The adjusted market cap of this index is worth C$ 927.9 million and includes the top banks in the country.
In Canada, there are many top financial banks and companies, of which one company stands out as its stock has returned 218.2 per cent to the shareholders in the last twelve months and has outperformed the Toronto Stock Exchange Composite Index's growth of about 15.6 per cent.
We are talking about goeasy Ltd. (TSX:GSY), the company that provides financial services like secured saving loans, unsecured personal loans and secured personal loans to its customers. As per goeasy, the company takes instant credit decisions and most loans are funded within 48 hours, making it one of the most popular lenders in Canada.
The GSY stock attracts investors' attention and, on that note, let's take a closer look at the company and stock’s performance to find out why it is worthy of your time:
Here’s what you must know about goeasy Ltd. (TSX:GSY)
According to the company website, goeasy enables its customers to take loans for electronics, computers, appliances, and furniture. It is based on the concept of lease-to-own with regards to the things required for a home.
A person can take a loan anywhere between C$ 500 to C$ 50,000 by applying online or across more than 400 branches in Canada. goeasy claims that it says yes more than any other company and that 76 per cent of the customers were approved for loans and that the company gives its decision with 10 minutes 90 per cent of the time. In addition, the financial services company claims that it has a satisfaction rating of 96 per cent.
In September, the Toronto Stock Exchange (TSX) released a list of the 30 top-performing companies in which goeasy ranked at the seventh position. The TSX30 list is made based on the performance of the stock on dividend-adjusted share price appreciation over three years. Notably, goeasy's share price appreciation was 327 per cent in three years.
The stock performance of goeasy
The GSY stock clocked a 52-week high of C$ 218.35 per share on September 24, and has been on an upward trend over the past year. At the end of the trading session on Wednesday, September 29, the stock closed at C$ 202.41 apiece, 223 per cent higher than the 52-week low of C$ 62.64 per share on September 28, 2020.
The GSY stock surged by 109 per cent year-to-date (YTD) and surpassed the sector of S&P/TSX Diversified Financials Index's growth of about 63 per cent in the same period.
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Financial performance of goeasy
In the second quarter of 2021, goeasy achieve record results. The company generated a record C$ 379 million in total loan originations, reflecting a year-over-year (YoY) increase of 122 per cent. Meanwhile, the operating income increased by four per cent YoY to C$ 56.1 million in Q2 2021.
As of June 30, 2021, the value of the total assets was C$ 2.45 billion, an increase of 81 per cent from the same comparable period of last year. goeasy distributed a quarterly dividend of C$ 0.66 per unit to the shareholders and registered a dividend yield of 1.3 per cent.
Bottom line
Stocks of financial services companies have shown significant growth since the beginning of this year and goeasy seems to be on the upward trajectory as indicated by its performance.
If you are looking to diversify your investment portfolio, goeasy could be an option. However, it is important to note that an investor should research before investing.
