These technology companies have been returning a great return on invested capital (ROIC) over the last five years. Growing ROIC translates into efficient use of capital and removes one-time return boosters such as foreign currency transactions. These companies, considering the current and long-term reliance on technology may benefit from increased investor interest.
CA Inc (NASDAQ:CA) provides IT management software and infrastructure inclusive of databases, applications, security and mainframe solutions. Currently, the company is focusing on new growth drivers such as Cloud Computing Management, Virtualization Management and Service Assurance/Management. The return on invested capital for the company consistently grew from 2.28% in 2006 to 12.04% in 2010. The stock closed at $22.65, down 7.32% year-to-date.
VeriSign Inc (NASDAQ:VRSN) is an Internet naming service that registers top-level domains such as .com, .net and so forth. The company also offers services such as enterprise network security and attack prevention. Recently, VeriSign sold its authentication services business to Symantec (NASDAQ:SYMC) and can now focus on its core web naming services offering. The return on invested capital for the company grew from 15.77% in 2007 to 69.77% in 2010. The stock closed at $33.69, up 16.98% year-to-date.
International Business Machines Corp (NYSE:IBM) is one of the largest information technology companies in the world and has operations in more than 170 countries. The company offers services such as system hardware, outsourcing services and infrastructure software. The sticky nature of the products and services offered by the company will allow it to maintain its growth for long run amongst businesses. The return on invested capital for the company grew from 17.75% in 2006 to 29.55% in 2010. The stock closed at $183.70, up 25.17% year-to-date.
SanDisk (SNDK) is a global leader in flash memory cards used widely in electronic devices such as cameras, cellphones and digital photo frames. The company sells its products primarily through retail and OEM sales. A rise in demand for electronic devices, user-generated data and intellectual properties owned by the company will allow SanDisk to continue its short-term growth despite intense competition within the industry. The return on invested capital for the company grew from 4.08% in 2006 to 20.95% in 2010. The stock closed at $43.89, up 5.84% year-to-date.
Compuware Corporation (NASDAQ:CPWR) provides software products and services to increase productivity and efficiency of its clients. The company has diversified services offerings to cover Emerging, Mature and Growth Technologies. This shows that the company is prepared for long run growth and value creation. The return on invested capital for the company grew from 9.24% in 2006 to 15.69% in 2010. The stock closed at $15.77, down 15.17% year-to-date.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.