Enghouse Systems (TSX:ENGH) - Share price, News & Analysis

ENGH fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	2/6
Past Performance	3/6
Financial Health	6/6
Dividends	5/6

ENGH Stock Overview

Enghouse Systems Limited, together with its subsidiaries, develops enterprise software solutions worldwide.

Rewards

Trading at 42.8% below our estimate of its fair value

Earnings are forecast to grow 3.33% per year

Pays a reliable dividend of 2.18%

Risk Analysis

Significant insider selling over the past 3 months

Enghouse Systems Competitors

Descartes Systems Group

TSX:DSG

CA$6.6b

Kinaxis

TSX:KXS

CA$4.0b

Coveo Solutions

TSX:CVO

CA$574.7m

Comcast

NasdaqGS:CMCS.A

US$188.2b

Price History & Performance

Summary of all time highs, changes and price drops for Enghouse Systems
Historical stock prices
Current Share Price	CA$33.92
52 Week High	CA$64.42
52 Week Low	CA$31.40
Beta	0.83
1 Month Change	-4.59%
3 Month Change	-16.49%
1 Year Change	-37.00%
3 Year Change	-0.82%
5 Year Change	14.98%
Change since IPO	835.72%

Recent News & Updates

Apr 28

Enghouse Systems (TSE:ENGH) Is Paying Out A Larger Dividend Than Last Year

Enghouse Systems Limited ( TSE:ENGH ) will increase its dividend on the 31st of May to CA$0.18. This will take the...

Apr 25

Capital Investments At Enghouse Systems (TSE:ENGH) Point To A Promising Future

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Amongst other things...

Apr 11

Enghouse Systems' (TSE:ENGH) Dividend Will Be Increased To CA$0.18

Enghouse Systems Limited ( TSE:ENGH ) will increase its dividend on the 31st of May to CA$0.18. This will take the...

Shareholder Returns

	ENGH	CA Software	CA Market
7D	4.1%	2.0%	0.8%
1Y	-37.0%	-17.7%	4.9%

Return vs Industry: ENGH underperformed the Canadian Software industry which returned -17.7% over the past year.

Return vs Market: ENGH underperformed the Canadian Market which returned 4.8% over the past year.

Price Volatility

Is ENGH's price volatile compared to industry and market?
ENGH volatility
ENGH Average Weekly Movement	6.6%
Software Industry Average Movement	12.0%
Market Average Movement	9.9%
10% most volatile stocks in CA Market	16.9%
10% least volatile stocks in CA Market	4.3%

Stable Share Price: ENGH is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: ENGH's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1984	1,813	Steve Sadler	https://www.enghouse.com

Enghouse Systems Limited, together with its subsidiaries, develops enterprise software solutions worldwide. It operates through two segments, Interactive Management Group and Asset Management Group. The Interactive Management Group segment provides customer interaction software and services to facilitate remote work, enhance customer service, increase efficiency, and manage customer communications across various types of interactions, including voice, email, web chats, text, and video.

Enghouse Systems Fundamentals Summary

How do Enghouse Systems's earnings and revenue compare to its market cap?
ENGH fundamental statistics
Market Cap	CA$1.89b
Earnings (TTM)	CA$93.75m
Revenue (TTM)	CA$459.18m

20.1x

P/E Ratio

4.1x

P/S Ratio

Is ENGH overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ENGH income statement (TTM)
Revenue	CA$459.18m
Cost of Revenue	CA$130.95m
Gross Profit	CA$328.23m
Other Expenses	CA$234.48m
Earnings	CA$93.75m

Last Reported Earnings

Jan 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.69
Gross Margin	71.48%
Net Profit Margin	20.42%
Debt/Equity Ratio	0%

How did ENGH perform over the long term?

See historical performance and comparison

Dividends

2.2%

Current Dividend Yield

39%

Payout Ratio

Valuation

Is Enghouse Systems undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

42.8%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: ENGH (CA$33.92) is trading below our estimate of fair value (CA$59.27)

Significantly Below Fair Value: ENGH is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: ENGH is good value based on its PE Ratio (20.1x) compared to the Canadian Software industry average (44.1x).

PE vs Market: ENGH is poor value based on its PE Ratio (20.1x) compared to the Canadian market (11.5x).

Price to Earnings Growth Ratio

PEG Ratio: ENGH is poor value based on its PEG Ratio (6x)

Price to Book Ratio

PB vs Industry: ENGH is overvalued based on its PB Ratio (4x) compared to the CA Software industry average (2.4x).

Future Growth

How is Enghouse Systems forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

3.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ENGH's forecast earnings growth (3.3% per year) is above the savings rate (1.6%).

Earnings vs Market: ENGH's earnings (3.3% per year) are forecast to grow slower than the Canadian market (7.5% per year).

High Growth Earnings: ENGH's earnings are forecast to grow, but not significantly.

Revenue vs Market: ENGH's revenue (8.3% per year) is forecast to grow faster than the Canadian market (6.4% per year).

High Growth Revenue: ENGH's revenue (8.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if ENGH's Return on Equity is forecast to be high in 3 years time

Past Performance

How has Enghouse Systems performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

16.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ENGH has high quality earnings.

Growing Profit Margin: ENGH's current net profit margins (20.4%) are higher than last year (20.1%).

Past Earnings Growth Analysis

Earnings Trend: ENGH's earnings have grown by 16.3% per year over the past 5 years.

Accelerating Growth: ENGH's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ENGH had negative earnings growth (-9.1%) over the past year, making it difficult to compare to the Software industry average (-9.1%).

Return on Equity

High ROE: ENGH's Return on Equity (19.9%) is considered low.

Financial Health

How is Enghouse Systems's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ENGH's short term assets (CA$337.4M) exceed its short term liabilities (CA$184.2M).

Long Term Liabilities: ENGH's short term assets (CA$337.4M) exceed its long term liabilities (CA$43.5M).

Debt to Equity History and Analysis

Debt Level: ENGH is debt free.

Reducing Debt: ENGH has no debt compared to 5 years ago when its debt to equity ratio was 0.9%.

Debt Coverage: ENGH has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: ENGH has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

Dividend

What is Enghouse Systems's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.18%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ENGH's dividend (2.18%) is higher than the bottom 25% of dividend payers in the Canadian market (1.91%).

High Dividend: ENGH's dividend (2.18%) is low compared to the top 25% of dividend payers in the Canadian market (4.91%).

Stability and Growth of Payments

Stable Dividend: ENGH's dividends per share have been stable in the past 10 years.

Growing Dividend: ENGH's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (39.4%), ENGH's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (34.4%), ENGH's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.7yrs

Average management tenure

CEO

Steve Sadler (70 yo)

22.08yrs

Tenure

CA$6,571,107

Compensation

Mr. Stephen J. Sadler, also known as Steve, has been the Chief Executive Officer and Chairman of the Board at Enghouse Systems Limited since April 1, 2000. Mr. Sadler has been a Director of CTI Group Holdi...

CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD5.12M) is above average for companies of similar size in the Canadian market ($USD2.24M).

Compensation vs Earnings: Steve's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: ENGH's management team is considered experienced (4.7 years average tenure).

Board Members

Experienced Board: ENGH's board of directors are seasoned and experienced ( 18.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: ENGH insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/21 00:00
End of Day Share Price	2022/05/20 00:00
Earnings	2022/01/31
Annual Earnings	2021/10/31