Get Paid A Nice Dividend While You Wait For Growth [GeoWire Weekly No. 125]

• GeoTeam
• March 3, 2024

A few weeks ago, I revisited the infrastructure screen we began to develop back in 2016, a project I hadn’t examined closely for quite some time. Upon looking at that update that showed up-to-date average returns of 247.91% for the stocks included in the screen…

…I felt it was time to re-evaluate the past inclusions.

Part of this reassessment was to determine which stocks still possess growth potential or if there were any new candidates that could be added to the screen .

Interestingly, during this process, we stumbled upon a company that, despite our previous criticisms, now appears to have realigned itself with an innovative vision that caught our attention.

This company, with annual revenue of about $12 million, operates within a sector valued at $51.16 billion in 2023 and now projected to grow at a significant compounded annual growth rate (CAGR) of 8.5% from 2023 to 2030. Furthermore, an interdependent market segment is growing at a CAGR of 17.5% during that same period.

What Has Us Excited 

 After years of stagnating growth, management has made considerable strides in revamping its software platform that works more comprehensively with its hardware and third party hardware. The software is fed real time data through sensors placed in the hardware to help its customers make decisions to prevent future loss of civilian life due to safety mishaps.

This revamp is particularly compelling because it simplifies the way that customers can access, deploy and host software solutions through the cloud and introduces a more robust data analytics platform. In a nutshell, this all  means that it’s much easier for the company to scale its revenue at a rapid pace.

This realignment seems to be in direct response by the U.S. and foreign governments asking companies in this industry to address the severity of safety mishaps occurring in their industry. This is why billions of dollars have been earmarked to this industry by the recent infrastructure bill, suggesting that the company is positioning itself to capitalize on this looming dispersion of funds.

Furthermore, the stock is currently severely undervalued, with a price-to-earnings (PE) ratio of less than 10, offers an attractive dividend, and is showing signs of transitioning into a growth story.

This transition hints at a potential for the P/E ratio to expand in the future, especially as the company pursues a strategy to acquire smaller competitors to gain market share—a tactic reminiscent of $CNSWF (CSU.TO) approach, which yielded a remarkable 13,000% return since 2008. Management is also going to embark on a brilliant strategy to place its superior tracking sensors in third-party hardware already installed in the market.

This shift from a previously stagnant position over the last several years to one of potential growth is obviously intriguing to us. We aim to better understand the company’s new direction, the sustainability of its growth strategy, and how it plans to leverage the industry’s NEW positive outlook and the financial backing from the infrastructure bill to its advantage.

Below is a full original Cliff Note provided to us by MS Microcaps that fully encapsulates why they added it to their index of Tier One Quality microcap stocks.

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