CA - CA, Inc - ROE of 17% exceeds the industry average of 13%

CA, Inc. (CA) continues to offer solid growth and income. The company is scheduled to release fiscal fourth-quarter and full-year results on May 22, 2008. CA recently announced that it will move its stock exchange listing from The New York Stock Exchange to The NASDAQ®. The company's ROE of 17% exceeds the industry average of 13%. CA declared a regular, quarterly cash dividend of four cents per share in late February. The company's dividend yield of 0.7% is a competitive one within its industry as the technology/software space is not one that normally offers dividends.

Full Analysis

CA, Inc. is one of the world's largest information technology (IT) management software companies. The company's software and expertise unify and simplify the management of enterprise-wide IT. CA's Enterprise IT Management (EITM) vision helps organizations manage systems, networks, security, storage, applications and databases securely and dynamically. Customers can benefit by building on their IT investments, rather than replacing them, and do it at their own pace. Founded in 1976, CA is headquartered in Islandia, N.Y., and serves customers in more than 140 countries.

Recent Events

The company's report date for fiscal fourth-quarter and full-year results is right around the corner on May 22, 2008.

In mid-April, CA announced that it will move its stock exchange listing from The New York Stock Exchange to The NASDAQ® Global Select Market, effective April 28, 2008. The company noted that its shares will be traded on NASDAQ under the ticker symbol CA.

"As one of the world's leading software companies, our move to NASDAQ demonstrates further our commitment to enhance value for our shareholders," said Joseph Doncheski, vice president, Investor Relations for CA, Inc. "Our decision was made after careful and thorough consideration as to which market alternative was best aligned with our company's growth strategy. While we have enjoyed our 20-plus year partnership with The New York Stock Exchange, we believe that NASDAQ's multiple market makers provide a variety of benefits and support for our shareholders."

Income

The company declared a regular, quarterly cash dividend of four cents per share in late February. The dividend was paid out on March 28, 2008. CA's dividend yield of 0.7% is a competitive one within its industry as the technology/software space is not one that normally offers dividends.

Growth

In addition to offering income when many of its competitors do not, the software maker is solid growth pick. One sign of the company's strong growth is its return on equity (ROE) of 17%, which is better that the industry average of 13%.

In late January, CA reported fiscal third-quarter non-GAAP earnings of 36 cents per share, eclipsing last year’s 24 cents and surpassing the consensus estimate by a healthy 44%. Revenue for the third quarter totaled $1.100 billion, versus $1.002 billion in the year-ago quarter.

The company stated that this was another solid quarter, its fifth in a row. CA added that it remains on course to finish the year with revenue and earnings per share exceeding the updated annual outlook provided at its financial analyst day in December.

This Growth & Income company increased its revenue guidance for 2008 to a range of a $4.25 billion to $4.28 billion from its previous outlook of $4.15 billion to $4.2 billion. CA also upped its fiscal 2008 non-GAAP earnings projection to a range of $1.22 to $1.26 per share from a prior guidance of $1.06 to $1.10 per share. Wall Street estimates are in line with the company’s outlook.

Content Courtesy: Zacks Investment Research

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