2 Bruised Dividend Titans Worth Buying on the Cheap

The alternative lending space has become a hunting ground for bargain seekers looking for cheap dividend stocks to buy. Right now, the market is practically giving away two of Canada’s premier fintech operators. As concerns over consumer financial health and credit losses mount, investors have pummeled goeasy (TSX:GSY) stock and Propel Holdings (TSX:PRL) stock, sending their valuations into the “undervalued” basement. However, for contrarian investors who can look past the near-term noise, these bruised dividend titans offer a rare combination of high yields, double-digit growth, and single-digit earnings multiples.

Both cheap dividend stocks have dropped significantly from their peaks, yet both continue to aggressively raise dividends. Just when finding growth at a reasonable price is increasingly difficult, these two TSX dividend stars are trading as if the sky is falling — even as their underlying loan books tell a much more resilient story. Here’s why GSY and PRL stock deserve a spot in your dividend portfolio today.

goeasy stock: The 11-year dividend-growth champion

goeasy is a pound-for-pound dividend growth stock currently trading at a massive discount, offering a 5.5% yield that looks remarkably secure. While goeasy stock lies battered, falling nearly 50% from its 52-week high, the company’s dividend, which has grown over 11 consecutive years, remains healthy. With a payout ratio sitting comfortably below 40% of normalized earnings, management has plenty of room to keep that streak alive while the market hyper-focuses on temporary credit cycles.

The credit services stock’s valuation here is nothing short of screaming. Trading at a forward price-to-earnings (P/E) of roughly 5.6, goeasy stock sits at a steep discount to the broader financial services sector.

Skeptics point to rising delinquencies, but they’re overlooking the structural shift in goeasy’s business: 48% of its $5.44 billion loan book is now secured, providing a much-needed safety net. Furthermore, the company’s ability to fund $350 million in annual loan growth purely from internal cash flow means it isn’t beholden to volatile capital markets for growth capital.

As smaller players exit due to funding constraints and regulatory pressure, goeasy is gobbling up market share in an alternative lending market that is still growing at a 14% annual clip. The cheap dividend stock could command higher valuation premiums once calm returns to the Canadian subprime loans market.

Propel Holdings: A cheap dividend stock with AI-powered growth potential

Propel Holdings is a high-octane growth engine that is trading at valuations consistent with a stagnant utility, currently trading at approximately 8.5 times forward earnings despite a 31% surge in 2025 revenue.

PRL stock recently dipped following a fourth-quarter earnings miss. Strategic investments and front-loaded provisioning for a massive acceleration in loan originations drove the earnings miss, with revenue growth coming in subsequent quarters. To a savvy investor, PRL stock’s 42% pullback from six-month highs is a gift, offering a 4.8% forward dividend yield on a company that just announced its 10th consecutive dividend hike in February 2026.

What makes Propel unique is its AI-powered credit platform, which allows it to maintain a 27% adjusted return on equity by accurately pricing risk across Canada, the U.S., and now the U.K.

Management believes the peak of U.S. credit loss provisioning is now in the rearview mirror. With the recent launch of Propel Bank and a $60 million funding agreement with Mesirow, the company is rapidly evolving from a simple lender into a diversified financial platform. If management’s forecast of 18-24% loan growth for 2026 holds true, the current share price could look like a historical anomaly by this time next year.

Which bruised titan fits your portfolio?

The investment choice between goeasy stock and Propel Holdings stock depends on your appetite for geography and yield. goeasy stock is the steady king of the Canadian subprime market, offering a higher 5.5% yield and a decade-long track record of dividend raises. It’s potentially a safer bet for income-hungry investors who want a dominant market leader at a fire-sale price.

Propel Holdings offers more torque for growth seekers. Its expansion into the U.S. and U.K. markets, combined with its proprietary AI tech, gives it a much larger total addressable market.

Neither stock is a risk-free trade, but with valuations this low, the margin of safety is finally back in favour of the bulls.

The post 2 Bruised Dividend Titans Worth Buying on the Cheap appeared first on The Motley Fool Canada.

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More reading

• The 2 Best TSX Stocks to Buy Before a Recovery Takes Hold
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• 1 Incredibly Cheap Canadian Dividend Growth Stock to Buy Now and Hold for Decades
• Turn a TFSA Into $300 in Monthly Tax-Free Income
• 3 Undervalued Canadian Stocks Worth Buying Without Hesitation

Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Propel. The Motley Fool has a disclosure policy.