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Summary
- The S&P/TSX Composite index rose by 0.83% on Wednesday and the S&P/TSX Capped IT index rose by 0.58% on the day.
- Computer Modelling Group Ltd., a reservoir simulation software provider, has a P/E ratio of 33.9x and a dividend yield of 2.02% based on Wednesday’s close.
- Softchoice Corporation, a technology services and solutions company, has a P/E ratio of 26.79x and a dividend yield of 2.44% based on Wednesday’s close.
The S&P/ TSX capped IT index ended trade higher by 0.58% on Wednesday, October 11, 2023. The IT sector’s gains through the day were lower than the benchmark index’s rise.
The broader S&P/TSX Composite index rose by 0.83% on Wednesday, settling at 19,663.84 by the day’s end.
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Here are two TSX-listed IT sector stocks that have surpassed S&P/TSX Composite index’s gains on Wednesday:
Computer Modelling Group Ltd. (TSX: CMG)
Computer Modelling Group Ltd offers reservoir simulation software tailored for the oil and gas sector. CMG has a market cap of over US$800 million.
For the June 2023 quarter, Computer Modelling reported a total revenue growth of 29% to US$20.74 million. Meanwhile, the total operating expenses decreased by 3% during the quarter.
Image Source: ©2023 Kalkine®; Data Source: Company Reports
The operating profit margin significantly improved, rising from 31% in the comparative quarter to 47%. Basic earnings per share (EPS) came in at US$0.09, surpassing the EPS of US$0.05 in the comparative quarter. Additionally, the company achieved free cash flow per share of US$0.09 and paid out a dividend of US$0.05 per share.
Based on Wednesday’s closing price of US$9.92, CMG has a P/E ratio of 33.9x and a dividend yield of 2.02%. At Wednesday’s close, CMG was higher by 5.64% intraday and by 68.14% on a YTD basis.
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Softchoice Corporation (TSX:SFTC)
Softchoice Corp is a technology services and solutions company dedicated to empowering organizations to adopt agility and innovation, fostering engagement, connectivity, and creativity among their employees.
For Q2 2023, the adjusted EBITDA experienced a slight 0.4% decrease, reaching US$24.9 million compared to US$25.0 million in Q2 2022. Foreign exchange fluctuations had a negligible impact.
Income from operations for the quarter showed a 3.0% increase over Q2 2022, reaching US$19.0 million. Diluted net income per share rose to US$0.23 from US$0.12 in Q2 2022, primarily due to gains from foreign exchange, although this was partially offset by higher income taxes. Adjusted diluted EPS, however, decreased to US$0.23 from US$0.27 in Q2 2022.
Image Source: ©2023 Kalkine®; Data Source: Company Reports
The company's strong cash flow generation resulted in a consolidated net debt of US$88.6 million as of June 30, 2023, compared to US$95.7 million a year earlier.
Based on SFTC’s closing price of US$18 on Wednesday, SFTC has a P/E ratio of 26.79x and a dividend yield of 2.44%. At Wednesday’s close, SFTC stock rose by around 4.6% intraday, while on a YTD basis it was 4.71% lower.
