Comtech Telecommunication (NASDAQ:CMTL) is among those stocks that are offering steady dividends with a strong share price appreciation. The company currently offers a quarterly dividend of $0.10 per share, yielding around 1.87%. Its share price soared 84% in the last twelve months, making it a solid pick for growth investors. Its stock is currently trading close to $21.5, down slightly from the 52-week high of $23 a share.

Analysts are expecting a strong growth in its share in the coming days, due to its strong fundamentals and improving financial numbers. Moreover, Comtech stock also appears undervalued trading around 30 times to earnings and 1.1 times to book value, compared to the industry average of 33 and 2.4 times, respectively.

In the last three year, its average revenue growth was standing around 16%, higher than the industry average of 6%. In the latest quarter, Comtech generated revenue of $121 million, while i its-wide book-to-bill ratio was at 1.36 at the end of the latest quarter. Its total order backlog of $490 million represents strong demand for Comtech’s products and services.

Its CEO said, “Fiscal 2018 is off to a good start and our first quarter results exceeded our expectations. During the quarter, we received a number of large strategic orders and experienced strong order flow across many of our product lines. Based on our current business momentum, fiscal 2018 is beginning to look like a very strong year.”

Comtech has returned $2.5 million in quarterly dividends to investors in the past quarter. Its operating cash flows were hovering around $6 million and capital investments were at $1 million. Thus, the company was left with $5 million in free cash flows, compared to dividend payments of $2.5 million. Moreover, the gap in its dividend payments and free cash flows offer a room for further growth.

Overall, Comtech expects to generate a steady growth in sales and earnings this year, which would offer additional support to the share price. Therefore, Comtech stock offers a buying opportunity considering lower valuations, strong fundamentals, and higher cash returns.

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