Canada’s main stock index has been on a roller coaster ride thus far in 2025. Trade tensions with the U.S. are the reason for the downtrend in recent weeks. However, a temporary market weakness is a buying opportunity because some quality companies trade at undervalued prices.
One Canadian stock in the high-growth information technology sector is a strong buy in 2025. Evertz Technologies (TSX:ET) is appealing for its long-term growth prospects and high dividend yield. The current share price of $11.27 (-10.56% year to date) is a steal, and a rebound is on the horizon following the record results in the third quarter (Q3) of fiscal 2025.
Company profile
Evertz is a major player in the broadcasting and media technology industry. It designs, manufactures and markets video and audio infrastructure solutions for the television, telecommunications and new-media industries. Content creators, broadcasters, specialty channels, and television service providers form the customer base.
This $858.9 million company is at the front and centre of an evolving industry. Evertz’s consistent profitability in the last four fiscal years and three quarters in fiscal 2025 indicates financial stability and success amid complex technological challenges. Investors should take note of the niche business.
Total investments in research and development in the past five years to fuel future innovation and growth opportunities have reached over $500 million. With a strong foundation for growth, Evertz will capitalize on enormous, exciting opportunities in fiscal 2026 and beyond.
The road to leadership
Evertz focused on and invested early in research and development. The goal is to become the leading supplier to the broadcast industry and address the ongoing technical transition to IP and IT-based production, workflow and distribution systems. By creating more efficient and agile workflows and high-quality video, Ultra HD, High Dynamic range initiatives will proliferate.
Customers generate additional revenue and reduce costs through efficient signal routing, distribution, monitoring and management of content. Evertz also enables the automation and orchestration of more streamlined and agile workflow processes on-premise and in the Cloud.
Record revenue
In the three months ending January 31, 2025, revenue increased 1.21% year over year to $136.9 million, a new quarterly revenue record. Net earnings and cash provided by operating activities rose 10.8% and 75.3% to $21.1 million and $52.9 million, respectively, versus Q3 fiscal 2024. Total dividend payments after three quarters reached $44.9 million.
Evertz’s purchase order backlog is also expanding, evidenced by the $239 million excess as of February 28, 2025. The demand for Evertz’s IP, IT, & Cloud native services and solutions is ever-increasing. Besides its niche business, Evertz’s financial health is rock-solid, given the “zero” debt, rising cash reserves, and mounting order backlog.
Rare gem
According to management, as one of the largest pure players in the communication equipment industry, Evertz provides innovative solutions to customers and rewards shareholders with recurring income streams (and capital gains). Expect the company to maintain its leadership position as broadcasting becomes more complicated soon.
Lastly, the tech stock is a rare gem, as very few high-growth tech companies pay dividends. If you invest today, the divided offer is a juicy 6.97%.
