A Canadian Dividend Stock Down 50% to Buy Forever

Propel Holdings (TSX:PRL) is a fintech company that most investors outside of Canada have never heard of. It uses artificial intelligence to lend money to consumers whom traditional banks routinely turn away.

Propel has grown revenue at a 46% compound annual growth rate (CAGR) since 2019. It also pays shareholders an annual dividend of US$0.54 per share, yielding over 3%.

Valued at a market cap of $822 million, the TSX dividend stock is down 50% from all-time highs, allowing you to buy the dip.

The bull case for the TSX dividend stock

About 37% of U.S. adults cannot cover a $400 emergency expense. In Canada, 54% of people say they’re living paycheque to paycheque. Traditional banks largely ignore these consumers because of their lower credit scores.

Propel fills that gap. Its AI platform evaluates borrowers more comprehensively than a standard credit score. Propel factors in behavioural data and other signals to make smarter lending decisions.

The company operates across more than 50 states and provinces in North America, has facilitated 1.3 million in loans and lines of credit since its founding, and has funded over US$2 billion in total originations.

The addressable market is enormous. The global fintech lending market is estimated at US$1 trillion, and there are roughly 90 million underserved consumers in North America and the United Kingdom alone.

In the third quarter of 2025:

• Propel delivered record revenue of US$152.1 million, up 30% year over year.
• Total originations funded hit a record US$205 million, up 37%.
• Net income rose 43% to US$15 million.

Propel also raised its annual dividend to $0.84 per share, an 8% year-over-year increase. That’s the ninth consecutive dividend hike since the company went public on the Toronto Stock Exchange in 2021.

Propel unlocks new growth runway

A key development at Propel right now isn’t its earnings report.

In early 2026, the company received regulatory approval from the Office of the Commissioner of Financial Institutions of Puerto Rico to establish Propel International Bank, Inc., a fully licensed banking subsidiary.

Until now, Propel operated by partnering with existing banks to originate loans. While the model has worked well, the banking license is a long-term driver for the fintech entity.

Propel Bank is licensed as an International Financial Entity and operates under U.S. federal laws, including anti-money laundering statutes. It will initially focus on providing underwriting, compliance, and customer service to Propel’s existing and future bank partners. Over time, it opens the door to new products, new markets, and significantly more control over the business.

CEO Clive Kinross put it plainly: “Propel Bank marks the next step in our journey to become global leaders by strengthening our partnership platform, expanding our reach, and opening new pathways for growth.”

Why is the TSX dividend stock so cheap?

The short answer is macro noise. The company tightened its underwriting in the back half of 2025 due to pressure on lower-income consumers from persistent inflation, slower wage growth, and the effects of a prolonged U.S. government shutdown on SNAP (Supplemental Nutrition Assistance Program) benefits and consumer sentiment. That led management to trim its full-year growth guidance slightly.

But here’s the thing: Propel has navigated tougher environments before. The company was profitable through COVID, the 2023 inflation spike, and every credit cycle it has faced.

Management noted that delinquencies were already improving as underwriting adjustments took effect and the pipeline of loan applications has never been stronger.

The company also has a rapidly growing U.K. business, which delivered record originations in Q3 and is on pace for more than 50% revenue growth in 2025. Management expects that to accelerate toward 100% growth in 2026.

At current prices, you’re getting a proven AI-powered lender with an impressive dividend growth streak, a freshly minted banking license, and a record operating track record, at roughly half the price the market was willing to pay not long ago.

Given consensus price targets, the TSX stock trades at a 72% discount in February 2026.

The post A Canadian Dividend Stock Down 50% to Buy Forever appeared first on The Motley Fool Canada.

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More reading

• Invest $5,000 in This Dividend Stock for $168 in Passive Income
• 3 Canadian Stocks Ready to Surge in 2026
• 3 Top Canadian Growth Stocks for February 2026

Fool contributor Aditya Raghunath 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.