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Summary
- During the pandemic, the tech stocks witnessed a boom; it is expected to do well this year as well.
- With the threat of the new variants of the coronavirus, another lockdown cannot be ruled out, thus reliance on tech companies is only going to increase.
Amidst the COVID-19 pandemic, the tech stocks witnessed a boom and they delivered good returns. Since most of the offices are shut and people are working from home, market experts believe that the tech companies will do well across the world, including Canada.
Canada has some high-growth tech stocks. In early March, the market witnessed a sharp selling of tech stocks, leading to valuation concerns. But, as these stocks shed some of their gains, it looks like an ideal time to rack up these stocks. Let's take a look at five of the best tech stocks beyond Shopify:
Dye & Durham Limited (TSX:DND)
A legal technology company, Dye and Durham (TSX:DND) is a cloud-based software company that got listed on the TSX last year. The company has a large customer base and is known for its merger and acquisitions. As a result, it is expected that the company's stock can sustain an uptrend.
On March 15, Dye and Durham announced that their common shares will be added to the S&P/TSX Composite Index.
Dye and Durham's stock has grown by almost 95 per cent in six months but has gone down by 7 per cent year-to-date (YTD), and investors can see this as an excellent entry point. The scrips were priced at C$ 44.71 apiece at market close on March 15.
It has a market cap of C$ 3 billion and holds a P/B ratio of 5.5. Last month, the company released the financial results for three and six months ended December 31, 2020. The company declared that it generated revenue of C$ 33.7 million (for the three months ended December 31, 2020) and an adjusted EBITDA of C$ 17.1 million, which was C$ 8.7 million from comparative period in the prior year.
Absolute Software Corporation (TSX:ABST)
This company provides services related to the management and security of computing devices. Absolute Software (TSX:ABST) has a strong presence in the United States, Canada and the rest of the world. It serves a variety of sectors such as healthcare, education and finance.
The stock has grown by 111 per cent in one year and 28 per cent year-to-date. The company has a market cap of C$ 954 million and holds a P/B ratio of 29.7.
Absolute’s total revenue was US$ 29.9 million in Q2 FY2021, which was up by 16 per cent year-over-year.
Absolute Software has a strong Annual Recurring Revenue of US$ 117.5 million as of December 31, 2020. This represents an increase of 17 per cent over the prior year.
Enghouse Systems Limited (TSX:ENGH)
Enghouse Systems has been one of the best-performing technology stocks for the last ten years. The company provides Enterprise Resource Planning (ERP) solutions for remote work, thus making it ideal for the company to grow as almost everybody has been working from home since the outbreak of the coronavirus.
When the pandemic was at its peak, Enghouse Systems' stock prices boomed. With the threat of the new variants of the coronavirus, another lockdown cannot be ruled out, thus reliance on tech companies is only going to increase with time. Under such uncertain times, investors can hold onto the tech stocks, keeping in mind the long-term gains.
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The stocks of this company grew up by 40 per cent in one year and it is down by almost 2 per cent year-to-date. The company has a market cap of over C$ 3 billion and has a good return on equity of 21.38 per cent.
Enghouse Systems recently released the first quarter results for the period ended January 31, 2020. The company's revenue for the first quarter was C$ 119.1 million, up from C$ 110.7 million in the prior year. The cash flows from operating activities were C$ 41.7 million, an increase of 18 per cent compared to $35.3 million in the prior year.
Nuvei Corporation (TSX:NVEI)
Montreal-based payment processing company, Nuvei made history last year when it went public and raised C$ 700 million. The company has a base of at least 50,000 customers, most of them are in the sports betting sector.
The company's stock has grown by over 33 percent in the last three months and it has a market cap of C$ 3 billion. Last week, the company declared the results of the fourth quarter and full-year ended December 31, 2020. In the fourth quarter, Nuvei's total volume was at US$ 13.9 billion, up from US$ 9.1 billion in the prior year.
The company posted a net income of US$ 22.6 million in Q4 2020, whereas there was a net loss of US$ 3.1 million in 2019.
Constellation Software Inc (TSX:CSU)
One of the top tech performers in Canada, Constellation Software makes and customizes software for the public and the private sector. The company has a good presence across the world, such as North America, Africa, South America, Europe and Australia.
The stock has grown up by 33 per cent in a year and 4 per cent year-to-date. The company has a market cap of C$ 36 billion and has a 48.55 per cent return on equity.
Last month the company declared results for the fourth quarter and full-year ended December 31, 2020. The company reported that its net income increased to US$ 149 million in Q4 2020, up by 62 percent in Q4 2019.
The cash flows from operating activities were at US$ 355 million in Q4 2020, up from US$ 255 million for the comparable period in 2019.
