Investors looking longingly at stellar earnings results from Amazon and Alphabet Inc. (Google’s new holding company) have a Canadian option to consider: Constellation Software Inc. (TSX:CSU).

The software-business giant’s stock is up 66% year-to-date, with a stunning five-year return of 1,200%. The company gets little media attention, but will be in the news this week when it releases its third-quarter results on October 29. Investors will be hoping for similar results compared with the second quarter, when Constellation grew its revenue by 7% to $444 million and reported adjusted net income of $80 million, up 23% from the prior year’s second quarter.

Analysts are keen on Constellation, even though the triple-digit stock is expensive by Canadian standards. Jason Donville, president and CEO at Donville Kent Asset Management, expects the company to grow by at least 25% in 2015 and to “once again generate superior, risk adjusted returns for its shareholders.”

Other analysts also like Constellation. Morningstar recently listed the company as a favourite of institutional investors, with an annual earnings momentum of 44%.

Constellation is known for its shrewd acquisitions. Although Q3 has been relatively quiet, in September the company closed a deal through its Perseus division to acquire the Market Leader business from Zillow Group. Market Leader is a CRM software system for the real estate industry. The deal cost Constellation US$23 million; it’s not a bad price when you consider that two years ago, the Market Leader group sold for $355 million when Zillow purchased Trulia, the former owner of Market Leader.

Constellation completed eight smaller acquisitions in Q2 worth $112 million.

Constellation pays a quarterly dividend of $1 per share, a number that could be considered low considering the company has a market cap of $12.31 billion and an enterprise value of $12.6 billion. The company has maintained its dividend at this price since it began paying a dividend in April 2012.

Constellation may be a stock for investors with deep pockets, but considering its track record, it’s unlikely to be a company you’ll regret buying.

The one stock you want to own for 2015

Does your portfolio have rock-solid blue chips at its core? If it does... GREAT! If not, you might want to reconsider your strategy.

Either way, we think you should take a look at what our analysts have identified as one TOP stock for 2015 and beyond--a stock with a tollbooth-like business; a solid management team; and a reliable, consistent, and rising dividend--and you can download the name, ticker symbol, and price guidance absolutely FREE.

Simply click here to receive your Special FREE Report, "1 Top Stock for 2015--and Beyond."


Let’s not beat around the bush – energy companies performed miserably in 2015. Yet, even though the carnage was widespread, not all energy-related businesses were equally affected.

We've identified an energy company we think offers one of the best growth opportunities around. While this company is largely tied to the production of natural gas, it doesn't actually produce the gas. Instead, it provides the equipment required to get natural gas from the ground to the end user. With diversified operations around the globe, we think it's a rare find in the industry.

We like it so much, we’ve named it as 1 Top Stock for 2016 and Beyond. To find out why, simply enter your email address below to claim your FREE copy of this brand new report, "1 Top Stock for 2016 and Beyond"!

Fool contributor Doug Watt has no position in any stocks mentioned. David Gardner owns shares of Alphabet (A shares), Alphabet (C shares), and Tom Gardner owns shares of Alphabet (A shares) and Alphabet (C shares). The Motley Fool owns shares of Alphabet (A shares), Alphabet (C shares), and