Top Technology Value Investment for 2021

CGI (TSX:GIB.A)(NYSE:GIB) delivers services to corporations such as digital strategy, architecture, solution design, development, integration, implementation, and operations.

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CGI (TSX:GIB.A)(NYSE:GIB) delivers services to corporations such as digital strategy, architecture, solution design, development, integration, implementation, and operations. These services cover the full spectrum of technology delivery.

The company has a price-to-earnings ratio of 22.94, price-to-book ratio of 3.62, and market capitalization of $25.94 billion. Debt is very sparingly used at CGI, as evidenced by a debt-to-equity ratio of just 0.61. The company has excellent performance metrics with an operating margin of 15.61% and a return on equity of 16.43%.

CGI’s strategy is executed through a business model that combines client proximity with an extensive global delivery network to deliver several benefits. The company works closely with clients to provide a high level of responsiveness, partnership, and innovation. Further, CGI’s local presence is complemented by an expansive global delivery network that ensures clients have 24/7 access to best-fit digital capabilities and resources.

In addition, clients benefit from CGI’s unique combination of industry domain and technology expertise. The company invests in developing and recruiting professionals with extensive industry and business technology expertise. In addition, a majority of CGI consultants and professionals are also owners through the company’s share-ownership plan, which provides an added level of commitment to the long-term success of CGI.

CGI’s investment in quality frameworks and rigorous client satisfaction assessments have resulted in a consistent track record of on-time and within-budget project delivery. With regular reviews of engagements and transparency at all levels, the company ensures that client objectives are consistently followed at all times. This thorough process enables CGI to generate continuous improvements for all stakeholders by applying corrective measures as soon it is required.

CGI helps clients define a digital strategy and roadmap, and advance information technology (IT) modernization initiatives through an agile approach that facilitates optimization of critical systems to deliver enterprise-wide change. Clients entrust CGI with full or partial responsibility for IT and business functions and CGI usually delivers significant efficiency gains and cost savings.

For CGI, typical services in an end-to-end customer engagement include application development, integration and maintenance, technology infrastructure management, and business process services, such as in collections and payroll management. Business process services contracts are long term in nature, with a typical duration greater than five years, and CGI gets to participate in the digital transformation of several businesses.

The company’s intellectual property (IP) portfolio is valuable. Designed in collaboration with clients, CGI’s IP solutions provides comprehensive capabilities to improve federal back-office operations. These solutions offer practical support for today’s financial, acquisitions and budgeting operations, combined with strategic solutions to position agencies and organizations for the rapidly changing environment of the future.

CGI intends to continue executing a growth strategy, expanding both through profitable organic growth and through accretive acquisitions. Today, more than ever, government and commercial organizations across industries rely on technology as a core part of any business model and to drive change. Any new service, program, or efficiency improvement implemented as part of these changes brings a need for additional IT services that CGI can efficiently provide.

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 Nikhil Kumar has no position in any of the stocks mentioned. The Motley Fool recommends CGI GROUP INC CL A SV.

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