Technology is one of the most dynamic sectors for investment. Tech companies see explosive growth, steep falls, and more volatility than sectors like banking and energy, especially on the TSX. Similar to any other industry, however, the tech sector has established players with a history of growth and stability.
Supply chain solutions
Kinaxis is a 35-year-old company that provides supply chain solutions to businesses all across the globe, including giants like Unilever, Schneider, and Nissan. The company is decently sized, with a market cap of $2.79 billion, especially compared to the other tech companies on TSX.
Kinaxis’s core product is RapidResponse, a centralized supply chain system for companies. It’s a cloud-based system and helps accommodate immediate changes all across the complete supply chain of a business.
The software must be doing its job very well because Kinaxis is growing at a fantastic pace. And its growth is not a flame that burns very bright for a while and then snuffs, like many tech stocks.
Rather, Kinaxis’s growth is consistent, steady, and fast. In the past five years, the company’s market value has grown 468%. This year has been relatively slow in terms of growth, but the market value still managed to rise by 48%.
The company is currently trading at $106 per share at writing. As per the price-to-earnings of 154 and price-to-book of almost 13, the stock is way overpriced.
Given how many investors have staked on Kinaxis’s future growth, it’s understandable. If Kinaxis continues to grow at the current pace, your investment this Christmas might get doubled by the Christmas of 2021.
Information technology consultants
CGI is another tech company to consider. The company started as an IT consultant company in 1978 when IT was a nascent sector. The company wasn’t an immediate success; neither did it rock the TSX in its early years.
The company truly started its upward journey toward a higher market value somewhere in 2009. The company’s 10-year growth is a remarkable 718%.
Right now, CGI’s market value is $109.3 per share. This year’s growth has stood at 28.7%, very close to the five-year growth breakdown.
That could indicate that the stock has finally found its groove, and if anything significant doesn’t shake the broader market or company’s core business, you might expect a near 30% growth each year. It’s not very glamorous, but it’s relatively less volatile.
Human resource and technology company
Morneau Shepell is primarily a human resource company that has expanded to the technological sector. The company is augmenting its core business with technological advances. One of the major subsidiaries of the company is LifeWorks, an employee wellness platform.
Morneau Shepell’s market value has grown by about 100% in the past five years. This year’s growth has been relatively higher, about 29%. Currently, a single share of Morneau Shepell is worth $33.25 at writing.
It’s the only company on this list that pays out dividends. The current yield is an adequate 2.33%, and the company hasn’t slashed its dividends in the past five years.
The Canadian tech sector doesn’t see too much investor concentration, and even the investors that do take an interest in tech companies often gravitate toward growth monsters like Shopify.
While it’s true that most tech companies don’t mimic the growth patterns of Shopify, each company has its unique mix of growth, stability, dependability, and prospects to offer — and Kinaxis, CGI and Morneau Shepell’s offerings might well be worth a place on your Christmas list.
One little-known Canadian IPO has doubled in value in a matter of months, and renowned Canadian stock picker Iain Butler sees a potential millionaire-maker in waiting...
Because he thinks this fast-growing company looks a lot like Shopify, a stock Iain officially recommended 3 years ago - before it skyrocketed by 1,211%!
Iain and his team just published a detailed report on this tiny TSX stock. Find out how you can access the NEXT Shopify today!
Fool contributor Adam Othman owns shares of Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool recommends CGI GROUP INC CL A SV, KINAXIS INC, and MORNEAU SHEPELL INC. Kinaxis, CGI and Shopify are recommendations of Stock Advisor Canada. Morneau Shepell is a recommendation of Dividend Investor Canada.