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The Only Tech Stock I’d Buy With My Tax Refund This Year

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Tax season is upon us. But don’t be stressed. You might actually get a tax refund this year rather than owing. That comes from the many new benefits and credits offered by the Canada Revenue Agency (CRA). So you might be better wondering how you can put that cash to good use.

Are tech stocks the answer?

The first thought might be with tech stocks. You wouldn’t be wrong, necessarily. However, the vast majority of tech stocks trading on the TSX right now are overpriced. That comes from a crazy year that has put these companies into the category of a necessity. It also means there could soon be a correction.

I’m definitely not saying you should sell these stocks, but I do think if you’re looking to buy you might want to consider companies that have a long history. This can be hard with tech stocks, but not impossible.  In fact, there’s one high-growth stock that’s been around for decades I would pick up with my tax return before any other.

Constellation Software

What you want from tech stocks is growth. That’s exactly what you get from Constellation Software Inc. (TSX:CSU). The company’s ability to grow even during the fast-paced market is remarkable considering it’s been around for so long. The main goal of the company really is growth, through acquisition. It focus on buying up small and medium-sized tech businesses across numerous verticals, creating a diverse portfolio within the tech industry for decades.

In fact, the company is so successful and stable management really doesn’t write annual shareholders reports. Instead, they only write letters when something big happens. This happened recently when the company announced it would stop distributing special dividends so that it can use the money to make even more acquisitions.

At first this might look bad. But if you want share growth, then the company will get it by making these acquisitions. Right now is the perfect time to buy as the pandemic continues to wage ware on small and medium businesses; sad, but true. So Constellation could see even more growth in the short years to come.

Even more growth

Then there’s the company’s other side of growth, and that’s through its share price. As I said, Constellation has been around for decades. In the last 15 years alone, shares have risen a whopping 12,353%! That’s a compound annual growth rate (CAGR) of 38.64%, enough to make any investor faint.

Shares are expensive, absolutely. But if you’re willing to buy other tech stocks at this price without the history Constellation has, you should absolutely be buying up this stock. The company will soon be moving into large vertical market software companies to acquire. These large businesses could see the company soar to stratospheric numbers. It’s incredible that more people don’t talk about the success of this stock!

Bottom line

Yes, this company continues to trade near all-time highs. Yes, it’s expensive. But it also has very little wiggle room on share price, even during market downturns. Constellation is like buying a safe stock but in a strong industry. Before other tech stocks, I would dig into this one again and again.

But it's true, there's another HIGH GROWTH tech stock out there that could also boom.

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Software.

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