LOWELL, MA - CSP Inc. (NASDAQ:CSPI), a provider of security and packet capture products, has declared a two-for-one stock split as a stock dividend, scheduled for shareholders of record by March 6, 2024. The company expects the new shares to be distributed on March 20, 2024, with trading to begin on a post-split basis the following day. This move will roughly double the number of outstanding shares to approximately 9.75 million.
CEO Victor Dellovo sees the split as a step to improve stock liquidity and attract institutional investors, coinciding with the interest in the company’s new ARIA Zero Trust PROTECT offering. CSPi also recently increased its quarterly cash dividend to $0.05 per share pre-split, with the next dividend payable on March 8, 2024, to shareholders on record as of February 26, 2024.
CSPi’s operations span two divisions, focusing on cybersecurity solutions and IT services. The company has roots in supporting defense and intelligence agencies and now offers a range of products and services aimed at securing data and enhancing network security.
This report is based on a press release statement from CSP Inc.
InvestingPro Insights
As CSP Inc. (NASDAQ:CSPI) announces a stock split to potentially enhance liquidity and attract more investors, the company's financial health and market performance offer a mixed picture. With a market capitalization of 144.74 million USD, CSP Inc. is trading at a high earnings multiple, sporting a P/E ratio of 34.94, which suggests investor confidence in the company's future earnings capacity. This is further reinforced by the adjusted P/E ratio for the last twelve months as of Q1 2024, which stands at 37.06.
InvestingPro Tips indicate that CSP Inc. holds more cash than debt on its balance sheet, which is a reassuring sign of financial stability for potential investors. Moreover, the company's liquid assets exceed its short-term obligations, providing a buffer against unexpected financial challenges. These factors are particularly relevant in light of the company's recent stock split announcement and may contribute to the improved stock liquidity that CEO Victor Dellovo expects.
On the flip side, the company is trading at a high P/E ratio relative to near-term earnings growth, with a PEG ratio for the last twelve months as of Q1 2024 at 1.8. This could suggest that the stock's current valuation is optimistic compared to its earnings growth potential. Nevertheless, CSP Inc. has experienced a strong return over the last year, with a 167.53% price total return, which may justify the higher multiples to some extent.
For investors looking for more in-depth analysis, InvestingPro offers additional tips, including insights into CSP Inc.'s EBITDA valuation multiple and its return over various time frames. There are 12 more InvestingPro Tips available that could help investors make a more informed decision about CSP Inc. To access these tips, visit Investing.com/pro/CSPI and remember to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.