Topic: Value Stocks

Value Stocks: Revenue jumps for Calian Technologies


Revenue for both divisions of Calian Technologies jumped in the last quarter. The timing of new and recurring business from existing clients will help to sustain the stock’s high dividend yield.

CALIAN TECHNOLOGIES (Toronto symbol CTY; has two main divisions: Business and Technology Services (which supplies 70% of the company’s revenue) provides engineers, health care workers and other skilled professionals on a contract basis; Systems Engineering (30% of revenue) sells hardware and software for testing, operating and managing satellite and other communication systems.

In the three months ended December 31, 2015, the company’s revenue rose 15.2%, to a record $64.5 million from $56.0 million a year earlier. Excluding one-time items, Calian earned $3.3 million, or $0.45 a share. That’s up 22.2% from $2.7 million, or $0.37 a share, a year earlier.

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Value Stocks: Steady orders from Department of National Defense boost revenue

The Business and Technology Services division continues to benefit from recurring orders from Canadian federal government departments, including the Department of National Defence. This segment’s revenue rose 9.0% in the latest quarter.

Revenue at the Systems Engineering division jumped 42.0%. This business worked on a number of new contracts in the latest quarter. Another reason for the revenue increase was the timing of certain projects, which can cause the division’s revenue to swing widely from time to time.

The company holds cash of $5.2 million, or $0.70 a share, and has no debt. The stock trades at just 11.6 times this year’s forecast earnings of $1.60 a share. Calian pays a quarterly dividend of $0.28, which gives it a high 6.0% yield, and that rate appears sustainable.

Recommendation in Stock Pickers Digest: BUY

For our advice on how to uncover the most promising value stocks, read How to identify the most undervalued stocks worth investing in.

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