The two largest cryptocurrencies, Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), made strong waves in 2023. The former surged 154%, reminiscent of its glory days, while the latter’s 91% return wasn’t bad at all.
Their momentum could carry over into 2024 following the US security regulator’s approval of 11 exchange traded funds (ETFs) for Bitcoin. Some fund managers expect ETFs for Ethereum to follow.
With this development and tailwind, is it a good time to invest in cryptos? As of this writing, BTC and ETH sell for US$40,727.64 and US$2,370.80, respectively. But besides the high prices, cryptocurrencies remain risky plays.
For regular or risk-averse investors, tech stocks like Computer Modelling Group (TSX: CMG), Payfare (TSX: PAY), and Evertz Technologies (TSX: ET) are safer investments and have more potential than any other cryptocurrency.
Stable investment
CMG has been a stable investment in the high-interest rate environment. At $9.90 per share, the trailing one-year price return is 73.7%. This tech stock also pays a 2.02% dividend. The Calgary-based firm serves the energy industry providing software technology to leading energy companies worldwide.
The $801.3 million global software and consulting company’s expertise covers a broad spectrum of energy workflows. Its simulation software helps solve complex industry processes and lends end-to-end support. Over the last three years, CMG has consistently reported profits.
In the first half of fiscal 2024 (six months ending September 30, 2023), revenue and net income rose 27% and 63% year over year respectively to $43.4 million and $13.4 million. Notably, in Q2 fiscal 2024, free cash flow jumped 159% to $11 million versus Q2 fiscal 2023. Its CEO, Jain Pramod, reiterates that CMG’s goal is to establish durable organic growth over the long term, and a plan is in place to achieve it.
Niche play
Payfare is flourishing with the next-generation or gig economy workforce. The $325 million financial technology company partners with large gig platforms like Uber and Lyft providing digital banking solutions to gig workers. The current share price is only $6.80.
Investors are happy with the fintech’s stellar results in Q3 2023. In the three months ending September 30, 2023, revenue increased 35% to $47.2 million versus Q3 2022, a new record. Net income reached $4.8 million, representing a 684%-plus turnaround from the $0.82 million net loss a year ago.
Payfare’s CEO and founding partner, Marco Margiotta, expects the pipeline of new gig and Earned Wage Access clients to remain robust in 2024.
Imminent breakout
Evertz Technologies could break out in the back half of fiscal 2024, following strong top and bottom-line growth in the first half. In the six months that ended October 31, 2023, revenue and earnings rose 19% and 12% year over year respectively to $256.5 million and $38.1 million. Furthermore, at $13.85 per share, you can partake in the juicy 5.63% dividend.
The $1 billion company is a software-defined video network (SDVN) technology leader. Evertz is a designer and manufacturer of video and audio infrastructure solutions for the television, telecommunications, and new-media industries.
No investor protection
You’re not missing out if you can’t invest in cryptocurrencies. Remember, the crypto market still lacks regulation and investor protection from fraud and manipulation. Meanwhile, TSX tech stocks will likely outperform again in 2024 when interest rates come down.
