One reason that many Canadian investors tend to avoid tech stocks is the perception that many tech stocks are relatively risky, at least compared to the stocks from sectors like financials. However, several tech stocks offer a safe combination of consistent performance and fundamental strengths, making them ideal for reliable and robust growth. Here are three such stocks that you should look into in 2025.
Source: Getty Images
An IT consulting company
CGI (TSX:GIB.A) is an IT and business consulting company that has been around for almost five decades and has been a publicly traded entity for nearly three decades. This indicates that the company has strong roots and long-standing clients. This is also evident from its contract ratio of 70:30 extension/renewals to new contracts.
While its returns haven’t been top-tier, they have been relatively consistent and decent enough for a safe growth stock. It has returned 237% to its investors in the last decade, and even though it pays dividends, the yield is relatively low. The stock is currently trading at a decent valuation and is bullish, so if you want to buy it at a discounted price, you may have to wait.
A logistics software company
Descartes Systems Group (TSX:DSG) is one of the most potent, consistent growers currently trading on the TSX. It has been going up almost consistently for one and a half decades, with relatively minor bumps along the road. In the last decade, it generated significant returns for its investors — about 829%. The returns slowed down in the latter half of the decade (in the previous five years), but it’s still on track to return at least 300% to its investors in the current decade.
Apart from its performance consistency, one thing that makes Descartes safe is the massive network of logistics stakeholders. The company has also enhanced its platform with artificial intelligence (AI), and it can be integrated with a significant number of logistics applications, making it a good fit for a wide range of businesses seeking visibility and smart decision-making across its logistics and supply chain network.
A safety and monitoring company
If you want to invest in a hardware-related tech company, Blackline Safety (TSX:BLN) is a solid choice. This small-cap stock has gone through a slump and recovery cycle in the last five years and is currently growing at a solid rate. It shot up about 60% in the last 12 months alone, and if it keeps this pace, it can double its investors’ capital in less than two years.
Despite its solid growth pace, the stock is still discounted and trading at a price point 27% lower than its five-year peak. However, its financials are strong and boast significant insider ownership (about 4.3%). Institutions own a large segment of the company’s total market value, but hedge funds own a significant slice, too, which may cause worry. However, Blackline’s leadership position in its space and performance history can neutralize that fear.
Foolish takeaway
The three tech companies are worth considering in almost any market, but you might consider buying them when they are discounted. The stocks’ long-term growth potential is solid enough, but buying them at the right time can significantly boost your overall returns.
