Impressive decade of returns from Computacenter
Computacenter (CCC) has the best total return track record of any UK-listed technology company from the past decade, according to investment bank Stifel.
While the share price has been no slouch over the last decade it is the FTSE 250 company’s consistent dividends, both ordinary and special payouts, that add extra sheen to the returns of shareholders. Total return refers to the combined performance of share price and income.
Computacenter’s annual average return of 52.5% over that decade tops the list of seven companies within the Stifel technology universe to have been listed on the UK stock market for at least 10 years.
IT infrastructure firm Micro Focus (MCRO) and engineering design software supplier AVEVA (AVV) come second and third, generating average annual total return of 31.3% and 25.9% respectively over the decade.
Investors often forget the value of income on their investment portfolios over the long-term, gauging performance largely by the share price alone. Yet ‘Boring’ award winner Computacenter is a fine illustration of why that way of thinking is a mistake.
The ‘Boring’ awards are the tongue-in-cheek gongs handed out by TechMarketViews analyst Richard Holway to IT services businesses listed on the London stock market with an unbroken 10 year track record of earnings growth.
While that title may sound detrimental, implying reliable if a bit dull, that was certainly not the case in 2018 for Computacenter.
Last year the company racked up a 91.8% total return for shareholders, according to Stifel, thanks to ordinary dividends worth 27.4p per share paid out during the 12 months, plus a £100m value return by way of a tender offer actioned in February 2018.
Despite this impressive investment performance over the longer-term Computacenter is not immune from the vagaries of economic investment and investor sentiment. This has been clearly illustrated in recent months, with a soggy third quarter in October 2018 followed up by softness in the services business in a further update on 23 January. Computacenter’s share price has stabilised recently at £10.70.