Topics Growth Stocks

Calian Group $22.65 - Toronto symbol CGY

CALIAN GROUP $22.65 (Toronto symbol CGY; TSINetwork Rating: Speculative) (613-599-8600; www.calian.com; Shares outstanding: 7.4 million; Market cap: $167.3 million; Dividend yield: 4.9%) 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 June 30, 2016, revenue rose 13.9%, to a record $73.2 million from $64.3 million a year earlier. Excluding one-time items, Calian earned $4.0 million, or $0.54 a share in the quarter. That’s up sharply from $2.5 million, or $0.34 a share. The increased profits result from higher revenue.

The Business and Technology Services business continues to service recurring orders from Canadian federal government ministries, including the Department of National Defence. The division’s revenue rose 14.3% in the latest quarter.

Revenue at the Systems Engineering business rose 13.0% in the quarter from a year earlier. The Canadian Space Agency recently renewed a contract for Calian to provide support for its satellite operations.

The company holds cash of $13.3 million, or $1.80 a share, and has no debt. The stock trades at just 11.9 times this year’s forecast earnings of $1.90 a share. Calian pays a quarterly dividend of $0.28, which gives it a high 4.9% yield.

Calian Group is still a buy.

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