Computer Modeling Group Ltd. (TSX:CMG) is a Calgary-based software company that provides services for the oil and gas sector. Its reservoir simulation software helps oil and gas companies improve recovery processes. The stock has increased 10.4% in 2017 and has declined 2.8% year over year.
The company released its fiscal 2018 first quarter results on August 10. Computer Modeling Group saw its operating expenses move up 22% after moving its headquarters. Software license and professional services revenue climbed 1% to $18.98 million. The company boasts a strong balance sheet with no debt and $67.3 million in cash.
For its 2018 forecast the company stressed caution as oil prices remain in the $45 to $50 range. Prices have climbed since the first quarter report which should be encouraging for investors. Downward pressure on inventories following a brutal U.S. hurricane season saw prices rise in September. Heightened Middle East tensions and an extension on OPEC’s production halt beyond March 2018 could also help prices next year.
The stock offers a dividend of $0.10 per share representing a 4% dividend yield. There has been increasing concern for the Canadian oil and gas industry after the 2014 oil crash. However, investment in 2017 has climbed after a difficult 2016. An extension on the OPEC production halt should keep prices stable in 2018. This is an attractive growth stock that offers investors the chance to double up with the income it provides.
