Giant Interactive Group Inc (GA): A Small Cap Stock You Should not Miss

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If you’re in the hunt for a small cap stock with a bright future, Chinese online gaming company Giant Interactive Group Inc (NYSE:GA) would certainly make the grade. The company has been on a terrific run of late and looks set to get better. It might even turn out to be one of the best investments you might make this year since it offers tremendous prospects, a great dividend and trades at a trailing P/E of just 8 times.

A lot to like

Giant has kicked off the year in style by reporting yet another successful quarter, wherein it witnessed revenue growth of 17% and earnings growth of 35% from last year. Also, it has seen its top line improve on a sequential basis for 12 consecutive quarters now.

Giant Interactive Group Inc (ADR) (NYSE:GA)Moreover, Giant is a dividend dynamo. It once again proved the same by declaring a regular cash dividend of $0.42 per share, which translates into a juicy yield of around 6.7%. The stock has already gained 15% so far this year and has a strong pipeline of games, apart from a solid strategy. Let’s see how Giant is going about its business and why it’s poised to get even better.

A 6.1% jump in active paying accounts and a 7.4% rise in average revenue per user from the year-ago period indicate that Giant’s games are doing pretty well in the Middle Kingdom. This is the result of the company’s strategy of extending the life of its successful games through expansion packs apart from developing interesting new games.

For instance, Giant Interactive Group Inc (NYSE:GA)’s first in-house first-person shooter Glorious Mission’s single player version turned out to be a huge success. The game has been downloaded more than a million times since being launched in the third quarter last year and the company is already working on an online version of it. Similarly, the company is planning to release expansion packs for its existing and successful games such as Elsword and Allods Online.

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