Is it a good company at a reasonable price? I have given up on this stock. It seems to be rather cyclical. It is cheap, but cheap does not necessarily mean a good buy. It has cut its dividend 3 times since 2020. I sold my shares but I will continue to track this stock. It is rather cheap.
I not own this stock of Computer Modelling Group Ltd (TSX-CMG, OTC-CMDXF), but I used to. I bought this company in 2008 because it is a dividend paying growth stock that would also be considered to be a small cap with a capitalization of around $115 million. Insiders are currently buying this stock. It has great growth and it is information technology a favourite sector of mine. When I sold some of my TD Bank stock in June 2009, I bought some more. Because the stock grew rapidly and because it is a tech stock.
I sold some shares in 2011 to lock in profit. I sold the rest of my shares in 2026. This stock has not done much lately and I need more cash in my RIF account. I have given up on this company. I made a lot of money at first as I bought it in 2008 and 2009 before it took off. I have still made good money at 18.95% per year with 7.55% from capital gains and 11.40% from dividends over the 17 years I have had this stock. It cut its dividend again this year. Dividend cuts are never a good sign.
When I was updating my spreadsheet, I noticed there is a big turnover in Directors. They have a new Chairman that was not on the board before and of the directors I was following, only 1 remains. The CEO has been in that position for some time, but there has been a lot of changes in staff. Note that it has a financial year ending at March 31 each year. I am looking at the financial year ending March 31, 2026.
If you had invested in this company in December 2015, for $1,003.47 you would have bought 83 shares at $12.09 per share. In December 2025, after 10 years you would have received $225.76 in dividends. The stock would be worth $433.26. Your total return would have been $659.02. This would be a total loss of 4.92% per year with 8.06% from capital loss and 3.14% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $12.09 | $1,003.47 | 83 | 10 | $225.76 | $433.26 | $659.02 |
The current dividend yield is low with dividend growth non-existent as dividends are declining. The current dividend yield is low (below 2%) at 1.10%. The 5, 10 and historical median dividend yields are moderate (2% to 4% ranges) at 2.33%, 3.91% and 3.59%. The dividends growth to 2015 and then they were flat until 2020 and then they were decreased 50%. In 2026 they were decreased a further 80%.
The Dividend Payout Ratios (DPR) could be improved and is going in the right direction. The DPR for 2026 for Earnings per Share (EPS) is too high at 57% with 5 year coverage at 74%. The DPR for 2026 for Funds from Operations (FFO) is good at 39% with 5 year coverage at 52%. The DPR for 2026 for Company’s Free Cash Flow (FCF) is good at 48% with 5 year coverage high at 60%. The DPR for 2026 for Cash Flow per Share (CFPS) is good at 36% with 5 year coverage too high at 60%. The DPR for 2026 for Free Cash Flow (FCF) is good at 22% with 5 year coverage fine at 50%. FCF for 2026 varies from $21M to $29M. I am using the $29M value.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 57.14% | 74.19% |
| FFO | 38.71% | 52.57% |
| FCF C. | 48.00% | 60.44% |
| CFPS | 36.32% | 51.20% |
| FCF | 22.88% | 49.82% |
Debt Ratios are fine, but Liquidity could be improved. The Long Term Debt/Market Cap Ratio for 2026 is good at 0.02 and currently at 0.03. The Liquidity Ratio for 2026 is low at 1.00 and 1.00 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.31 and currently at 1.48. I like to see this ratio at 1.50 or higher. The Debt Ratio for 2026 is good at 1.66 and 1.66 currently. The Leverage and Debt/Equity Ratios for 2026 are fine at 2.52 and 1.52 and currently at 2.52 and 1.52
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.02 | 0.03 |
| Intang/GW | 0.28 | 0.33 |
| Liquidity | 1.00 | 1.00 |
| Liq. + CF | 1.31 | 1.48 |
| Debt Ratio | 1.66 | 1.66 |
| Leverage | 2.52 | 2.52 |
| D/E Ratio | 1.52 | 1.52 |
The Total Return per year is shown below for years of 5 to 29 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | -9.71% | 5.06% | 1.36% | 3.71% |
| 2015 | 10 | -11.34% | -4.92% | -8.06% | 3.14% |
| 2010 | 15 | -3.10% | 3.91% | -1.42% | 5.33% |
| 2005 | 20 | 8.16% | 24.22% | 9.10% | 15.12% |
| 2000 | 25 | 8.91% | 43.73% | 18.19% | 25.54% |
| 1996 | 29 | 17.33% | 9.51% | 7.83% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 32.75, 26.75 and 33.09. The corresponding 10 year ratios are 20.34, 26.60 and 33.03. The corresponding historical ratios are 13.90, 21.08 and 26.87. The current ratio is 14.60 based on a stock price of $3.65 and EPS estimate for 2027 of $0.25. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $2.37. The 10-year low, median, and high median Price/Graham Price Ratios are 2.53, 3.46 and 4.37. The current ratio is 1.54 based on a stock price of $3.65. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Book Value per Share Ratio of 10.38. The current ratio is 3.65 based on a stock price of $3.65, Book Value of $78,331M and Book Value per Share of $1.00. The current ratio is 65% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. (However, these ratios are really high, especially the 10 year median at 10.38.)
I get a 10-year median Price/Cash Flow per Share Ratio of 19.85. The current ratio is 8.49 based on CFPS estimate for 2027 of $0.43, Cash Flow of $33.7M and a stock price of $3.65. The current ratio is 57% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 3.59%. The current dividend yield is 1.10% based on dividends of $0.04 and a stock price of $3.65. The current dividend yield is 69% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. However, this is not a good test for a company decreasing their dividends.
I get a 10 year median dividend yield of 3.91%. The current dividend yield is 1.10% based on dividends of $0.04 and a stock price of $3.65. The current dividend yield is 72% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive. However, this is not a good test for a company decreasing their dividends.
The 10-year median Price/Sales (Revenue) Ratio is 6.72. The current P/S Ratio is 2.25 based on Revenue estimate for 2027 of $113M, Revenue per Share of $1.62 and a stock price of $3.65. The current ratio is 67% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. The dividend yield tests do not work well when they are decreasing. Although, a decreasing dividend is never a good sign. The P/S Ratio test is a good one and it says that the stock price is relatively cheap. Another favourite stock price test is the P/GP Ratio test and that also says that the stock price is cheap. All the tests but the dividend yield tests says that the stock price is relatively cheap.
When I look at analysts’ recommendations, I find Buy (2) and Hold (3). The consensus is a Buy. The 12 month stock price consensus is $5.20 with a high of $6.00 and low of $4.50. The consensus stock price of $5.20 implies a total return of $43.56% with 42.47% from capital gains and 1.10% from dividends based on a current stock price of $3.65. The analysts are not very enthusiastic about the stock given that they think it will go up over 42% this year.
The last analyst entry on Stock Chase is dated in 2024. It is never a good sign when analysts lose interest in a stock. Amy Legate-Wolfe on Motley Fool says the stock is undervalue and imperfect but may offer opportunity. Aditya Raghunath on Motley Fool thinks you could grow wealth in your TFSA with this stock. The company put out a press release via Global Newswire about their fourth quarter ending in March 2026.
Simply Wall Street via Yahoo Finance reviews this stock and thinks it is a TSX Penny Stock to Watch. Simply Wall Street via Yahoo Finance looks at this stock and thinks it is a good idea for the company to invite Christopher Wright to its Board. There is a number of fair value estimates and they range from $4.64 to $18.62 per share. This shows how far apart private investors can be on this stock’s potential.
Computer Modelling Group Ltd is a software and consulting technology company engaged in developing and licensing reservoir simulation and seismic interpretation software. The company also provides professional services consisting of highly specialized support, consulting, training, and contract research activities. The firm has operations in the Americas, Europe, Middle East, Africa, and Asia-Pacific regions. Its web site is here Computer Modelling Group Ltd.
The last stock I wrote about was about was Waste Connections Inc (TSX-WCN, NYSE-WCN) ... learn more. The next stock I will write about will be Saputo Inc (TSX-SAP, OTC-SAPIF) ... learn more on Monday, July 6, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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