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Highlights:
- The S&P/TSX Capped Information Technology Index is in the red by over 20 per cent year-to-date (YTD)
- The CSU stock has a one month gain of 1.2 per cent and one week gain of over four per cent
- OTEX’s 12-month low of C$51.87 was on March 15 and it's currently only 2.78 per cent above it
The technology sector is a fairly diverse spectrum. From software as a service (SaaS) to hardware producers and online content, many believe the technology sector has boomed since the pandemic began. Technology is an integral part of most people’s lives.
The sector accounts for nearly seven per cent of the TSX Composite Index and it seems to have taken a bit of a beating so far this year. The S&P/TSX Capped Information Technology Index is in the red by over 20 per cent year-to-date (YTD).
As to whether this is because it gave away some of the gains it saw during the lockdown years is hard to say. As is determining whether tech stocks are currently undervalued.
Nonetheless, let us look at two TSX-listed technology companies.
Constellation Software Inc (TSX:CSU)
Constellation Software Inc is the second biggest kahuna of the above-mentioned technology index going by market cap. Its market cap is C$46 billion. The company customizes software for various types of companies, public and private.
The CSU stock last closed Friday, April 1, at C$ 2,175.63 after spiking nearly two per cent in the session. Despite its YTD loss of 7.3 per cent, its current gain over 12 months stands at 21 per cent. Noteworthy may be its one month gain of 1.2 per cent and one week gain of over four per cent which may seem to indicate it is on the rebound.
Also read: POET (PTK) & WeCommerce Holdings (WE): 2 TSXV tech stocks to explore
It has an earnings per share (EPS) of 18.4 and while it may not be the cheapest TSX stock to buy, it has a quarterly dividend of C$1 for a dividend yield of 0.234 per cent.
Open Text Corporation (TSX:OTEX)
Open Text Corporation was birthed at the University of Waterloo from a technology project involving the Oxford English Dictionary. Its specialty is information management, and it has a market cap of C$14 billion.
Also read: BCE Inc (TSX:BCE) & TELUS (TSX:T): 2 communication stocks to consider
OTEX closed Friday at C$53.31. The stock seems to be losing, down 12 per cent over 12 months, 16 per cent over nine months and 11 per cent YTD. Its 12-month low of C$51.87 was on March 15 and it's currently only 2.78 per cent above it and nearly 24 per cent below its 12-month high of C$69.79.
On February 3, the company said it was deepening its ties with Google Cloud for next-generation content services. The stock brings a quarterly dividend of C$0.221 with a dividend yield of 2.113 per cent.
Also read: SU, ABX & MFC: 3 TSX stocks under $50 to eye on April Fool’s Day
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Bottom line
Experts generally say the pandemic helped the industry, but it seems to have taken a beating in 2022. The above two stocks have lost less than the S&P/TSX Capped Information Technology Index. Much research into the company and industry is required before committing to an investment.
