Hi tdbarnes,
Sylogist is benefiting from the tech boom, up by ~19% this year. Unfortunately, the company has a mixed history of execution. In fact, if you look at the company's long-term chart you will see that the company has reached these levels a few times before cratering in the year that followed.
That being said, the company is benefiting from the pandemic. As an enterprise resource planning (ERP) company, the shift to remote work is upending business models. This is especially true in the public service markets, which is Sylogists' primary target. Given this, it is well positioned to accelerate growth. In the quarter ended June 30, which is the "pandemic" quarter, Sylogist increased EBITDA by 27% and posted record revenue. We think that this trend can continue.
Business models are changing, and it is likely that our new reality is here to stay. That will increase demand for ERP solutions. Further to this, Sylogist is becoming more aggressive in terms of acquisitions which will accelerate growth.
To top it all off, Sylogist is one of only 4 tech-listed Canadian Dividend Aristocrats. It has a 10-year dividend growth streak and raised the dividend the past two quarters. At 4.27%, it is also the highest yielding tech Aristocrat. The company is currently trading at 20 times forward earnings and 7.5 times sales. I'd consider it close to fully valued at these levels.
Overall, Sylogist is a decent tech option for income investors. It doesn't have the high growth rates of some of its peers, but the pandemic should lead to accelerated demand for its ERP solutions.
Mat