I do not own this stock of Enghouse Systems Ltd (TSX-ENGH, OTC-EGHSF). This stock has been recommended by Keystone Financial Publishing as a good Small Cap tech stock with dividends.
When I was updating my spreadsheet, I noticed that there is a lot of insider selling and insider selling by the CEO and CFO. Insider Selling is at 2.32% of market cap. This is very high. The financial year ends in October each year, so the last financial year ended on October 31, 2018.
The dividend yields are low and the dividend growth is good. The current dividend is just 0.97% with 5, 10 and historical dividend yields at 0.98%, 1.23% and 1.23%. Dividends have only been paid for 10 years. The dividend growth is shown in the table below and it is in the good range (of 15% or higher).
I believe that they can afford their dividends. The Dividend Payout Ratio for EPS for 2018 is 32% with 5 year coverage at 33%. The DPR for CPFS for 2018 was 16.8% with 5 year coverage at 17%.
Debt Ratios are good. The Long Term Debt/Market Cap Ratio is 0.00. It is too small to register in this ratio. The Liquidity Ratio has varied a lot over time with the one for 2018 at 2.24 and 5 year median at 1.53. The Debt Ratio is very good and it has always been with the current ratio at 3.41 and the 5 year median at 2.83. Leverage and Debt/Equity Ratios are good and have always been good. The current ones for 2018 are 1.41 and 0.41 respectively with 5 year medians at 1.52 and 0.52 respectively.
The Total Return per year is shown below for years of 5 to 22 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 18.58% | 16.25% | 15.08% | 1.16% |
| 2008 | 10 | 21.13% | 33.56% | 31.45% | 2.10% |
| 2003 | 15 | 15.76% | 15.06% | 0.70% | |
| 1998 | 20 | 16.18% | 15.64% | 0.54% | |
| 1996 | 22 | 15.06% | 14.62% | 0.44% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 26.42, 32.85 and 40.27. The corresponding 10 year ratios are 20.86, 26.23 and 32.00. The corresponding historical ratios are 16.76. 20.73 and 25.47. The current P/E Ratio is 29.35 based on a stock price of $36.98 and 2019 EPS estimate of $1.26. this stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of 13.46. The 10 year low, median, and high median Price/Graham Price Ratios are 1.56, 2.04 and 2.51. The current P/GP Ratio is 2.74 based on a stock price of $36.98. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median Price/Book Value per Share Ratio of 3.56. The current P/B Ratio is 5.76 based on Book Value of $350M, Book Value per Share of $6.41 and a stock price of $36.98. The current ratio s some 62% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 1.36%. The current dividend yield is 0.97% based on dividends of $0.36 and a stock price of $36.98. The current dividend yield is some 28% below the historical median. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Sales (Revenue) Ratio is 3.48. The current P/S Ratio is 5.40 based on 2019 Revenue of $374M, Revenue per Share of $6.03 and a stock price of $36.98. The current ratio is some 55% above the 10 year median. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that all the tests are showing this stock as relatively expensive. The testing for P/E Ratio is based on the 10 year ratios. The P/E Ratios have been rising quite fast.
When I look at analysts’ recommendations, I find Buy (4) and Hold (1). The consensus recommendations would be a Buy. The 12 month stock price consensus is $43.00. This implies a total return of 17.25% with 16.28% from capital gains and 0.97% from dividends based on a stock price of $36.98.
See what analysts are saying about this stock on Stock Chase. They like this company and feel it will continue to grow through acquisitions. Ambrose O'Callaghan on Motley Fool thinks that this stock is too good to pass up. The company announces an acquisition via News Wire. the company announced a two for one share split for January 25, 2019 on News Wire. Gavin Beck on Simply Wall Street looks at the company’s dividend and says it is low for this sort of company. However, he does not consider dividend growth.
Enghouse Systems Ltd is a Canada-based provider of software and services to a variety of end markets. The firm's operations are organized in two segments namely, the Interactive Management Group and the Asset Management Group. The firm has operations in Canada, the United States, the United Kingdom, France, Germany, Sweden, Israel, Croatia, Denmark, Norway, India, Japan, Hong Kong, Singapore, and Australia etc. Its web site is here Enghouse Systems Ltd.
The last stock I wrote about was about was Sylogist Ltd (TSX-SYZ, OTC-SYZLF) ... learn more. The next stock I will write about will be Valener Inc (TSX-VNR, OTC-VNRCF) ... learn more on Wednesday, January 30, 2019 around 5 pm. Tomorrow on my other blog I will write about Energy Stocks.... learn more on Tuesday, January 29, 2019 around 5 pm.
Also, on my book blog I have put a review of the book 100 Mistakes That Changed History by Bill Fawcett learn more...
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