Smaller Saskatchewan company shows stable dividend yield
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