Have You Considered This Underrated Tech Stock?

Investors: are you looking for a tech stock for your portfolio? Then consider this solid contender: Altus Group Ltd. (TSX:AIF).

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Often, when we think of tech stocks, we think of the U.S. giants, such as Apple Inc. (NASDAQ:AAPL). However, if you are looking to add a tech stock to your portfolio, there are some smaller Canadian options worth considering. Today, let’s take a look at Altus Group Ltd. (TSX:AIF).

What does Altus do?

Altus Group, headquartered in Toronto, provides software and data solutions and advisory services. The company focuses on commercial real estate and property tax and has offices on four continents. Its most well-known software is Argus Enterprise, which provides in-depth information regarding cash flow projections and valuations, investment analysis, and sensitivity and risk management.

What is there to like about Altus?

This is a stock that puts up some nice numbers. Revenue growth has averaged 14.23% annually over the last three years, better than the industry average of 10.41%. And revenue growth is currently pacing around 20% for fiscal 2017. The stock has a current net profit margin of 26%, putting it about middle of the pack compared to its peers. Altus has an industry-leading return-on-equity number of 32.81%, when most of its peers don’t break 15%. This is a company that knows how to turn investor dollars in profit.

The company is also moving more towards technology and further away from its non-tech services, which should bode well for the future. The company has acquired new tech to use in its business and created more technologies of its own. The prospects for revenue growth look nice over the next few years, and the company’s willingness to invest in itself is one of the main reasons.

We’ve been singing the praises of this stock for a while now here at the Motley Fool. You can read more company analysis here and here.

Third-quarter results

Altus reported third-quarter results on November 2. It reported adjusted earnings of $0.34 per share, in line with market expectations. This beat 2016’s third-quarter results by 9.68%.

Bottom line

This stock doesn’t boast a famous name or product, but it does solid work. If you are thinking of adding a tech stock to your portfolio, Altus Group Ltd. deserves your consideration.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Susan Portelance has no position in the companies mentioned. David Gardner owns shares of Apple. The Motley Fool owns shares of Apple and has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. Altus is a recommendation of Dividend Investor Canada.

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