CGI (TSX:GIB.A) is one of the most consistent wealth compounders in Canadian stock market history. Yet right now, the market is practically offering it at a fire-sale price. The Canadian tech stock has fallen roughly 50% from its all-time high.
I think that is a mistake the market will eventually correct, and patient investors who buy during this window could be very well rewarded. Let me be clear: CGI is a top TSX dividend stock pick for investors looking to buy the dip in 2025.
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A 20-year track record that speaks for itself
CGI is a Montreal-based information technology and business process services giant founded in 1976. The company serves over 5,500 clients across 400 locations worldwide, employing roughly 94,000 consultants and professionals.
Since fiscal 2005, CGI’s share price has compounded at 14.3% annually, while its adjusted earnings per share (EPS) have grown at a compound annual growth rate (CAGR) of 15.1%. Put simply, the company has quietly turned long-term shareholders into very happy investors for two decades straight. Valued at a market cap of $18 billion, CGI stock has returned 1,260% to shareholders since the start of 2001.
- In its fiscal second quarter of 2026 (ended in March), CGI reported $4.2 billion in revenue, up 3.3% year over year.
- Adjusted EBIT (earnings before interest and tax) came in at $692 million, for a very healthy margin of 16.6%. Adjusted EPS stood at $2.27, up 7.1% from the same quarter a year ago.
- On a trailing 12-month basis, bookings hit a record $18 billion, up 6% or nearly $1 billion year over year.
- The book-to-bill ratio was 108%, meaning CGI is winning more new business than it is delivering. This ratio is a leading indicator of future revenue growth.
Analysts tracking the TSX tech stock forecast free cash flow to expand from $2.12 billion in fiscal 2025 to $2.28 billion. With an annual dividend expense of $142 million, the dividend payout ratio is sustainable at less than 7%. Even if CGI triples its dividend, its payout ratio will be lower than 25%.
CGI’s board recently approved a quarterly cash dividend of $0.17 per share. The company also increased its credit facility by $1 billion, bringing total capacity to $2.5 billion. Its net debt-to-leverage ratio is just over one, which is conservative.
The company returned capital to shareholders through buybacks and dividends while continuing to invest in artificial intelligence and pursue acquisitions.
“Our pipeline over the next year validates this as the value of new opportunities grew by over 40%,” said CGI president and chief executive officer François Boulanger.
CGI has an AI moat
CGI is embedding artificial intelligence directly into the managed services contracts it already has with governments, banks, utilities, and other large enterprises.
- Its AI-powered managed services platform, DigiOps, now spans nearly 200 agents and 400 workflows.
- Every new managed services proposal the company submits includes advanced AI as the standard offering, a meaningful shift in how CGI delivers value, and it directly benefits margins.
- On the consulting side, Q2 bookings for advisory services were up 16% year over year.
Boulanger put it plainly on the call: “Clients today are not looking for generic AI capabilities. They want solutions tailored to their industries.”
With the tech stock down sharply from its peak, investors have an opportunity to buy a business with best-in-class financial discipline, a growing AI-driven pipeline, and a 20-year history of compounding EPS at over 15% annually.
Based on consensus price target estimates, CGI stock trades at a 40% discount as of May 2026.
