Investors looking for a company with strong dividend returns and stable but mild growth might consider Information Services Corporation of Regina.
The Saskatchewan-based public company, 31 per cent owned by the Government of Saskatchewan, offers income investors attractive features.
Currently trading at $13.76 a share, the 80-cent-a-year dividend yields 5.8 per cent yield plus the dividend tax credit benefit.
The Information Services Corporation was a Crown corporation but the Saskatchewan Party Government converted the operation into a public company while retaining a controlling share interest.
By 2014 revenues were $80.5 million. The just released 2019 financial data posted revenues of $133 million, increased from $119 million in 2018.
Armed with a long term agreement for registry of land title, personal property, liens, surveys, maps and corporations in Saskatchewan, the company has evolved with acquisitions.
Three divisions are registries, similar services provided to other jurisdictions, and technology services.
Last year registry revenue was flat at $70.3 million. Services revenue increased 20 per cent to $51 million. Technology consulting revenue increased 15 per cent to $24 million.
A number of acquisitions and contracts during the last three years have added revenues, profits, and promise of future stable growth.
In 2017, a $21 million purchase added automated software operation for lending, leasing and credit issuers. A $14.3 million acquisition added a registry technology service.
The next year saw a contract with the Irish companies registration office, land titles agreement with the Yukon, and a short term deal with the State of Missouri to support titles registry, and an agreement to do corporate registry for Nova Scotia.
Last year was less expansive but an agreement with Irish Aviation Authority for a new safety regulation system penetrated a new market.
Another $6.8 million acquisition brought an ownership identity operation into the fold.
Corporate outlook for 2020 — provided before the coronavirus outbreak — estimated 2020 revenues between $135 million and $139 million. That's not a great change, unlike most years.
The corporation offers investors stable revenues with low growth. Growth is based on local economic trends, but should keep pace with inflation.
Given the high yield, that is all investors can ask for. High yielding shares are generally a trade-off for lower growth.
With government control of ownership, investors need not worry about takeovers or multiple analysts’ enthusiastic outlooks driving stock price.
Only one analyst follows this relatively small company and put an $18.50 price target on the shares.
One caution. The company pays 72 per cent of earnings so any substantial drop in net income could endanger the dividend, with a reduced yield.
CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
