Three things stand out for big-capCA Technologies (
First, the company's annualized dividend yield is 3.4%. Few
stocks in its Computer Software-Specialty Enterprise group can
match that yield. Most stocks in the group don't pay a
Second, CA is the second-biggest software maker for mainframes
and technology infrastructure, according to researcher
While the big dividend pleases income investors, the word
"mainframe" translates as "old" to growth investors. About 55% of
sales are mainframe-linked.
The third item, though, could be the most important.
On Jan. 7, Michael Gregoire took over as CEO. Gregoire was the
CEO at California-based Taleo whenOracle (
) acquired the firm in 2012.
Gregoire embraced the takeover because, as he said at the
time, the move was best for the shareholders. Of course, Gregoire
was a large shareholder himself, but that's exactly what savvy
They want the CEO to think like a shareholder rather than like
a mere jobholder.
Can Gregoire refire CA?
Gregoire inherited a company that hasn't seen revenue grow in
double-digits for two years in a row (or more) since 1995-98. In
the fiscal year ended in March, revenue fell 4%. The Street
expects another 4% drop in fiscal 2014 and then 1% growth in
At the earnings call Wednesday, Gregoire said acquiring new
customers is key to jacking up sales. "Over the past 12 months,
we added more than 460 new logos," he said.
Cloud revenue is another area that holds long-term potential
for revenue growth. "We're early days on this," he said, and the
"awkward part" is that software as a service involves smaller
transactions. "So you don't really get to see that move the
revenue needle in a short period of time."