The Smartest TSX Stock to Buy With $500 Right Now

Itâs not always wise to actually buy a stock just because it looks popular or recently made headlines. In reality, markets move in cycles, and even solid companies can fall out of favour for a while. Thatâs often the time to lean in, because thatâs when real opportunities tend to show up â especially for investors starting with as little as $500 and aiming for long-term upside.

A temporary pullback does not necessarily mean a broken business. Sometimes it reflects short-term pressure while long-term growth prospects remain intact. And goeasy (TSX:GSY) could be a great example of a high-quality growth stock temporarily out of favour. In this article, Iâll talk about why goeasy fits this mindset well and why this top TSX stock still looks attractive today.

The smartest TSX stock to buy now

When you start looking beyond its recent price action and focus on what the business is actually doing, goeasy becomes hard to ignore. To put it simply, as a Canadian consumer lender, it focuses on near to non-prime borrowers through brands like easyfinancial and easyhome. The financial services firm provides unsecured and secured installment loans, point-of-sale financing, and leasing solutions across Canada. This is one of the key reasons why the demand for its services tends to stay resilient, even when economic conditions are less supportive.

From a market perspective, goeasy shares are trading around $125 per share, giving the company a market cap of roughly $2 billion.

Although GSY stock has fallen about 31% over the last year, it mainly reflects investor concerns around credit risk and interest rates rather than a collapse in its business activity. At the same time, the company continues to reward shareholders with a juicy annualized dividend yield of about 4.5%, backed by more than two decades of consistent dividend payments.

Why does it look mispriced right now?

To understand why this TSX stock looks mispriced, letâs look past the share price and focus on its operating momentum. In the third quarter of 2025, goeasy generated $946 million in loan originations, marking a 13% YoY (year-over-year) increase. This growth was supported by a 22% rise in credit applications, showing that consumer demand for credit remained strong.

In addition, its revenue climbed 15% YoY to a record $440 million during the quarter with the help of portfolio growth and strong performance across unsecured lending, home equity loans, and automotive financing. However, its profitability faced pressure. The company increased provisions for credit losses due to higher early-stage delinquencies amid the ongoing macroeconomic stress on borrowers.

This resulted in a decline in goeasyâs quarterly earnings, but the decline was tied to its focus on conservative credit management and higher non-cash adjustments, not a slowdown in lending demand or revenue generation.

Why goeasyâs long-term growth story looks strong

Interestingly, goeasy has been actively shifting its portfolio toward lower-risk products. Secured loans now make up around 48% of its loan book, which will help it reduce credit volatility over time. The company also continues to improve underwriting, collections, and borrower assistance programs, which support portfolio quality through economic cycles.

From a balance sheet perspective, goeasy ended the latest quarter with $2.3 billion in available funding capacity, providing flexibility to support future growth. The company expects its loan portfolio to continue expanding using internal cash flows alone, even without relying heavily on new external debt.

Given these fundamentals, for investors with $500 to invest right now, goeasy offers a solid blend of income, long-term upside potential, and a valuation that already reflects many near-term risks. As economic conditions stabilize over time, that gap between its business performance and stock price could narrow significantly.

The post The Smartest TSX Stock to Buy With $500 Right Now appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.