Smaller Saskatchewan com­pany shows sta­ble div­i­dend yield

Moose Jaw Express.com - - News - By Ron Wal­ter For Moose Jaw Ex­press

In­vestors seek­ing a nice div­i­dend in a sta­ble, slowly grow­ing com­pany could find their needs met by a small Saskatchewan-based op­er­a­tion.

The In­vest­ment Ser­vices Cor­po­ra­tion, also known as ISC, seems to fit the bill, yield­ing a cool five per cent on the cur­rent $16.10 share price.

This cor­po­ra­tion, con­trolled by the Saskatchewan Govern­ment’s 31 per cent own­er­ship, was a Crown cor­po­ra­tion par­tially pri­va­tized in 2013. When the NDP Op­po­si­tion loudly crit­i­cized the move, the Saskatchewan Party re­leased in­for­ma­tion show­ing the pre­vi­ous NDP govern­ment had plans to pri­va­tize this op­er­a­tion.

ISC has a 20-year agree­ment to man­age and op­er­ate registry ser­vices for Saskatchewan. The pub­lic com­pany started in 2013 run­ning the land ti­tles registry, vi­tal statis­tics, cor­po­rate registry, per­sonal prop­erty registry and min­eral claims registry.

Since then, Saskatchewan op­er­a­tions have added the as­bestos registry, en­hanced cor­po­rate and busi­ness registry.

Be­ing a pub­lic cor­po­ra­tion al­lows ISC to branch out of­fer­ing these spe­cial­ized ser­vices to other agen­cies and gov­ern­ments and de­vel­op­ing prof­itable op­por­tu­ni­ties.

Ex­pan­sion has been suc­cess­ful with the 2015 ac­qui­si­tion of ESV Ser­vices, an au­to­mated soft­ware provider to the leas­ing, lend­ing in­dus­try in On­tario and Que­bec.

Ser­vice of­fer­ings have ex­panded across the globe from Malaysia to Ire­land and the Ara­bian Penin­sula. The Yukon and Nova Sco­tia have signed on to land ti­tles ser­vices. Ire­land has adopted cor­po­rate registry ser­vices. Other op­er­a­tions in­clude Ohio, Mis­souri, the tax shel­ter is­lands of Guernsey and Jersey, Ser­bia and the United Arab Emi­rates.

Rev­enue has grown from $79.1 mil­lion in 2013 to $93.6 mil­lion last year. The com­pany projects $120 mil­lion rev­enue for 2018.

Debt is rel­a­tively low, around $20 mil­lion. Since be­com­ing a pub­licly-traded com­pany in 2013 shares have fluc­tu­ated from an ini­tial $16.64 to a high of $20.05 in March 2017. Of­fer­ing price was $14. The out­look for ISC shares hinges on the per­for­mance of the Saskatchewan econ­omy. If busi­ness is boom­ing, cor­po­rate ac­tiv­ity and real es­tate ac­tion is re­flected in more ISC rev­enues.

Without eco­nomic growth, rev­enue, net in­come and div­i­dends are stag­nant and sta­ble.

Note: to­day’s share price is pretty much the same as when the Crown was pri­va­tized.

While this is a sta­ble op­er­a­tion, with some growth from ex­pan­sion out­side the province, the mar­ket value around $280 mil­lion is rel­a­tively small. Sur­pris­ingly, three an­a­lysts, in­clud­ing CIBC and RBC, fol­low the com­pany. Also, sur­pris­ing: about 30 per cent of shares are held by in­sti­tu­tions. Small mar­ket values like ISC are usu­ally shunned by in­sti­tu­tions.

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 ron­[email protected]­tel.net

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