Constellation Software (TSE: CSU) is a Canada-based software company that grows by acquiring vertical market software (VMS) companies. Since its founding in 1996, it has grown to become one of the largest diversified software companies in the world. In 2021 alone, it generated US$5.1 billion in revenue and US$1.2 billion in free cash flow. Shareholders of Constellation have been healthily rewarded over the years. Since its IPO in 2006, the company’s stock price has skyrocketed by around 114 times in value, which equates to a compounded growth rate of 32% per year. In addition, for the past decade, Constellation shareholders have been collecting a dividend each quarter and have enjoyed three special dividends. Why has Constellation been such a success? One of the main reasons is that management has been excellent stalwarts of its capital. The company uses most of its cash flow generated from operations to acquire and...