is offering its first ever dividend, making it one of only a handful of Canada’s largest tech firms to distribute the profit-sharing payments to its investors.
By contrast, all of the largest players in many other TSX sectors pay out dividends, including financials, real estate, utilities and telecom services. “It’s a company that many investors felt should be paying a dividend given their strong and consistent cash flow generation, the underlying diversification of the business, the balance sheet and I think investors have conveyed that feedback to management over the years,” he said.
Across the border, many of CGI’s American competitors pay regular dividends, said Richard Tse, an analyst with National Bank Financial. He said CGI’s decision to start paying one will give it more flexibility and open up its shareholder base to investors who only invest in dividend-paying stocks, such as dividend fund managers.
Constellation Software Inc., Canada’s second largest technology company by market capitalization, pays a US$1-per-share quarterly dividend and used to pay out extra, special cash dividends to shareholders from its excess free cash flow.