Market volatility often pushes strong companies to discounted prices. When investors worry about economic slowdowns or credit risks, certain stocks can fall sharply even though their businesses remain solid. For long-term investors, those pullbacks sometimes create attractive buying opportunities.

Two Canadian dividend stocks that currently look beaten down — but still have strong fundamentals — are goeasy Ltd. and Propel Holdings Inc.. Both companies operate in the alternative lending industry and have seen their share prices decline significantly from previous highs, even as their underlying businesses continue growing.

goeasy: A Dividend Grower Trading at a Discount

goeasy has built a reputation as one of Canada’s strongest dividend growth companies. Despite the stock falling nearly 50% from its recent peak, the company continues to maintain a solid financial foundation.

The lender currently offers a dividend yield above 5%, supported by more than a decade of consistent dividend increases. Importantly, its payout ratio remains relatively conservative, leaving room for future dividend growth even if economic conditions remain challenging.

Another positive sign is the evolution of its loan portfolio. Nearly half of its loan book is now secured, which helps reduce risk compared with unsecured lending. The company also generates enough internal cash flow to continue expanding its loan portfolio without relying heavily on external funding.

With its shares trading at a relatively low earnings multiple compared with the broader financial sector, the stock could offer meaningful upside if investor sentiment improves.

Propel Holdings: Growth Potential With Income

Propel Holdings is another alternative lender that has experienced a significant share price pullback. The stock has dropped more than 40% from recent highs, partly due to short-term concerns about earnings and credit conditions.

However, the company continues to show strong growth potential. Revenue expanded rapidly over the past year, and management is investing heavily in technology and expansion initiatives to drive future growth.

Also Read: Long term investing in Canada

Propel also pays a dividend, currently yielding around the mid-single-digit range, and the company has steadily increased its payout in recent years. Its technology-driven lending platform helps evaluate credit risk more efficiently, allowing the business to maintain strong profitability.

Also Read: Dividend paying stocks Canada

Both companies face risks tied to the credit cycle, which explains why their shares have declined. However, their strong growth prospects, improving market positions, and attractive dividend yields may appeal to investors looking for undervalued income stocks.