Enghouse Systems Ltd. (ENGH) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Open Text Corp.

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BlackBerry Ltd.

Constellation Software, Inc.

Enghouse Systems Ltd.

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Lumine Group, Inc.

Dye & Durham Ltd.

Lightspeed Commerce, Inc.

Docebo, Inc.

Why is Enghouse Systems Ltd. ?

High Management Efficiency with a high ROE of 17.24%

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 90.58

Poor long term growth as Operating profit has grown by an annual rate -5.61% of over the last 5 years

Flat results in Apr 26

OPERATING CASH FLOW(Y) Lowest at CAD 99.07 MM
INTEREST(9M) At CAD 0.48 MM has Grown at 13.57%
ROCE(HY) Lowest at 12.04%

With ROE of 12.81%, it has a attractive valuation with a 1.45 Price to Book Value

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -31.81%, its profits have fallen by -5.6%

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -31.81% returns in the last 1 year, the stock has also underperformed S&P/TSX 60 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Enghouse Systems Ltd. should be less than 10%
Overall Portfolio exposure to Software Products should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Software Products)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Enghouse Systems Ltd. for you?

Medium Risk, Low Return

Absolute

Risk Adjusted

Volatility

Enghouse Systems Ltd.

-31.81%

-1.61

28.77%

S&P/TSX 60

29.6%

2.31

12.81%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

-0.17%

EBIT Growth (5y)

-5.61%

EBIT to Interest (avg)

90.58

Debt to EBITDA (avg)

Net Debt to Equity (avg)

-0.43

Sales to Capital Employed (avg)

0.83

Tax Ratio

19.65%

Dividend Payout Ratio

89.84%

Pledged Shares

Institutional Holding

0.04%

ROCE (avg)

34.21%

ROE (avg)

17.24%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.45

EV to EBIT

6.76

EV to EBITDA

4.87

EV to Capital Employed

1.82

EV to Sales

1.24

PEG Ratio

Dividend Yield

ROCE (Latest)

26.93%

ROE (Latest)

12.81%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bullish

Bearish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Moving Averages

Mildly Bearish (Daily)

KST

Mildly Bullish

Bearish

Dow Theory

Mildly Bullish

No Trend

OBV

Mildly Bearish

No Trend

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

2What is working for the Company

INTEREST COVERAGE RATIO(Q)

Highest at 24,969.81

-10What is not working for the Company

OPERATING CASH FLOW(Y)

Lowest at CAD 99.07 MM

INTEREST(9M)

At CAD 0.48 MM has Grown at 13.57%

ROCE(HY)

Lowest at 12.04%

DIVIDEND PAYOUT RATIO(Y)

Lowest at 0%

DIVIDEND PER SHARE(HY)

Lowest at CAD 5.21

NET SALES(Q)

Lowest at CAD 114.28 MM

OPERATING PROFIT(Q)

Lowest at CAD 26.47 MM

Here's what is working for Enghouse Systems Ltd.

Interest Coverage Ratio

Highest at 24,969.81

in the last five periods

MOJO Watch

The company's ability to manage interest payments is improving

Operating Profit to Interest

Here's what is not working for Enghouse Systems Ltd.

Interest

At CAD 0.48 MM has Grown at 13.57%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CAD MM)

Operating Cash Flow

Lowest at CAD 99.07 MM

in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (CAD MM)

Net Sales

Lowest at CAD 114.28 MM

in the last five periods

MOJO Watch

Near term sales trend is negative

Net Sales (CAD MM)

Operating Profit

Lowest at CAD 26.47 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (CAD MM)

Dividend per share

Lowest at CAD 5.21

in the last five years

MOJO Watch

Company is distributing lower dividend than previous years

DPS (CAD)

Dividend Payout Ratio

Lowest at 0%

in the last five years

MOJO Watch

Company is distributing lower proportion of profits generated as dividend

DPR (%)