SSC Security Services Corp.: A Dividend Champion with Cybersecurity Fuel for Growth

The security sector has long been a bastion of stability, but few companies can match SSC Security Services Corp.’s (ticker: SSC) 35-year streak of uninterrupted dividends—a testament to its financial resilience and operational discipline. Now, as cybersecurity demand soars and the company expands into high-margin tech solutions, SSC is poised to deliver both income stability and capital appreciation. For income-focused investors seeking a shield against volatility, this is a rare opportunity.

Dividend Resilience: Navigating Cycles with Unmatched Consistency

SSC’s 35th consecutive dividend—the latest at $0.03 per share (annualized $0.12, yielding 3.2% at current prices)—underscores its ability to thrive through economic turbulence. From the 2008 crisis to the pandemic and today’s inflationary pressures, SSC has maintained its payout, a rarity in an industry often buffeted by cyclical demand. This consistency stems from:
- Recurring revenue streams: Over 80% of revenue comes from long-term contracts in physical and electronic security, insulating cash flows from short-term swings.
- Prudent capital allocation: With $11.4 million in cash and no debt, SSC avoids overleveraging, enabling it to weather downturns while pursuing growth.
- Share buybacks: Over the past eight years, the company has repurchased 47% of outstanding shares, boosting per-share metrics and reducing dilution.

Financial Performance: 20% Revenue Growth and Margin Expansion in Q3 FY2024

SSC’s latest results are a masterclass in operational execution. In the third quarter of FY2024:
- Revenue jumped 20% YoY to $15.4 million, driven by strong demand for cybersecurity and physical security solutions.
- EBITDA surged 85% YoY to $4.9 million, with margins expanding to 32% of revenue—a reflection of cost discipline and pricing power.

This outperformance builds on a 15% revenue growth in Q2 FY2024, signaling a structural acceleration in profitability. Management attributes this to:
- Strategic cost controls: Gross margins improved to 17.1% in Q1 2025, up from 15.7% in 2023.
- Legacy asset liquidation: Converting non-core holdings into cash to fuel reinvestment in high-margin cybersecurity services.

Growth Catalysts: Cybersecurity and Industry Consolidation

SSC is not merely defending its dividend—it’s positioning itself to capitalize on secular trends:
1. Cybersecurity expansion:
- A $1.2 million contract with Canada’s largest airline (unveiled in Q3) highlights demand for integrated physical-cyber solutions.
- The 2022 acquisition of Logixx Security Inc. expanded its cybersecurity portfolio, now accounting for 25% of revenue.
- Partnerships like its collaboration with WBM Technologies (a leader in AI-driven cybersecurity) are driving innovation.

1. Industry consolidation opportunities:
2. SSC targets profitable Canadian security firms for acquisitions, leveraging its debt-free balance sheet to buy at reasonable valuations.

3. Management has signaled a “selective” approach, prioritizing deals that enhance margins and diversify service offerings.

4. Tax-advantaged dividends:

5. Eligible dividends (70% taxable at lower rates for Canadian residents) make SSC a tax-efficient holding for income investors.

Why Act Now?

The bull case for SSC is clear:
- Income stability: A 3.2% yield with a 35-year track record of growth.
- Growth catalysts: Cybersecurity adoption is exploding, and SSC’s EBITDA margins are primed to expand further as it scales.
- Debt-free flexibility: No leverage means no risk of dividend cuts, even in downturns.

Conclusion: Buy SSC for Income and Growth

SSC Security Services Corp. is a rare blend of income stability and growth potential, riding secular trends in cybersecurity while maintaining a fortress balance sheet. With 35 years of dividend resilience, 20%+ revenue growth, and strategic moves to capitalize on industry consolidation, this is a compelling buy for investors seeking both yield and capital appreciation.

Target price: Based on a 15x forward P/E (vs. sector average of 12x for stable dividend stocks) and FY2024 EPS estimates, a $4.00–$4.50 price target suggests 25–40% upside.

Action Item: Consider initiating a position in SSC, especially as its dividend yield remains attractive and its growth story gains momentum.

Note: All figures are as of Q3 FY2024 unless stated otherwise. Past performance does not guarantee future results.