TSX:ENGH

Stock Analysis Report

Enghouse Systems

Executive Summary

Enghouse Systems Limited develops and sells enterprise oriented applications software worldwide.

Snowflake

Fundamentals

Excellent balance sheet with acceptable track record.


Similar Companies

Share Price & News

How has Enghouse Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

2.5%

ENGH

1.0%

CA Software

-0.1%

CA Market


1 Year Return

-3.1%

ENGH

22.3%

CA Software

0.9%

CA Market

Return vs Industry: ENGH underperformed the Canadian Software industry which returned 22.3% over the past year.

Return vs Market: ENGH underperformed the Canadian Market which returned 0.9% over the past year.


Shareholder returns

ENGHIndustryMarket
7 Day2.5%1.0%-0.1%
30 Day-7.4%-2.3%-2.1%
90 Day4.4%1.2%-1.6%
1 Year-2.0%-3.1%24.3%22.3%4.4%0.9%
3 Year49.5%44.7%76.9%72.7%15.5%5.2%
5 Year113.4%102.6%163.4%155.9%25.7%7.5%

Price Volatility Vs. Market

How volatile is Enghouse Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

36.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: ENGH (CA$36.13) is trading below our estimate of fair value (CA$57.22)

Significantly Undervalued: ENGH is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ENGH is poor value based on its PE Ratio (30x) compared to the Software industry average (25.3x).

PE vs Market: ENGH is poor value based on its PE Ratio (30x) compared to the Canadian market (13.6x).


Price to Earnings Growth Ratio

Low PEG Ratio: ENGH is poor value based on its PEG Ratio (2.7x)


Price to Book Ratio

PB vs Industry: ENGH is overvalued based on its PB Ratio (5.2x) compared to the CA Software industry average (2.5x).


Next Steps

Future Growth

How is Enghouse Systems forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

11.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ENGH's forecast earnings growth (11.3% per year) is above the savings rate (1.9%).

Earnings vs Market: ENGH's earnings (11.3% per year) are forecast to grow slower than the Canadian market (13.2% per year).

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

Revenue vs Market: ENGH's revenue (13.1% per year) is forecast to grow faster than the Canadian market (5.7% per year).

High Growth Revenue: ENGH's revenue (13.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Enghouse Systems performed over the past 5 years?

18.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: ENGH's earnings have grown by 18.4% per year over the past 5 years.

Accelerating Growth: ENGH's earnings growth over the past year (15.1%) is below its 5-year average (18.4% per year).

Earnings vs Industry: ENGH earnings growth over the past year (15.1%) underperformed the Software industry 23.6%.


Return on Equity

High ROE: ENGH's Return on Equity (17.3%) is considered low.


Return on Assets

ROA vs Industry: ENGH has a higher Return on Assets than the Software industry average last year.


Return on Capital Employed

ROCE Improving: ENGH has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Enghouse Systems's financial position?


Financial Position Analysis

Short Term Liabilities: ENGH's short term assets (CA$233.6M) exceeds its short term liabilities (CA$163.7M)

Long Term Liabilities: ENGH's short term assets (233.6M) exceeds its long term liabilities (31.4M)


Debt to Equity History and Analysis

Debt Level: ENGH's debt to equity ratio (0.2%) is considered satisfactory

Reducing Debt: Insufficient data to determine if ENGH's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: ENGH's debt is well covered by operating cash flow (11338.8%).

Interest Coverage: ENGH earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: ENGH has a low level of unsold assets or inventory.

Debt Coverage by Assets: ENGH's debt is covered by short term assets (assets are 316.539290x debt).


Next Steps

Dividend

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

1.22%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Enghouse Systems before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.2%marketbottom25%2.0%markettop25%6.0%industryaverage1.4%forecastin3Years1.2%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: ENGH's dividend (1.22%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: ENGH's dividend (1.22%) is low compared to the top 25% of dividend payers in the Canadian market (5.98%).

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.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34.9%), ENGH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Enghouse Systems's salary, the management and board of directors tenure and is there insider trading?

2.5yrs

Average management tenure


CEO

Stephen Sadler (68yo)

19.5yrs

Tenure

CA$4,606,163

Compensation

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


CEO Compensation Analysis

Compensation vs. Market: Stephen's total compensation ($USD3.48M) is about average for companies of similar size in the Canadian market ($USD2.15M).

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


Management Age and Tenure

2.5yrs

Average Tenure

61yo

Average Age

Experienced Management: ENGH's management team is considered experienced (2.5 years average tenure).


Board Age and Tenure

15.6yrs

Average Tenure

64yo

Average Age

Experienced Board: ENGH's board of directors are seasoned and experienced ( 15.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$103,12513 Mar 19
Forfar Trust
EntityCompany
Shares3,000
Max PriceCA$34.37
SellCA$309,47028 Jan 19
Stephen Sadler
EntityIndividual
Role
Chief Executive Officer
Executive Chairman & CEO
Shares8,400
Max PriceCA$36.85
SellCA$1,673,87621 Jan 19
Stephen Sadler
EntityIndividual
Role
Chief Executive Officer
Executive Chairman & CEO
Shares46,000
Max PriceCA$36.59
SellCA$2,094,60611 Jan 19
Stephen Sadler
EntityIndividual
Role
Chief Executive Officer
Executive Chairman & CEO
Shares60,000
Max PriceCA$35.75
SellCA$1,101,26025 Dec 18
Stephen Sadler
EntityIndividual
Role
Chief Executive Officer
Executive Chairman & CEO
Shares31,600
Max PriceCA$34.85
SellCA$227,25025 Oct 18
Eric Demirian
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares6,000
Max PriceCA$37.87
SellCA$150,80722 Oct 18
Eric Demirian
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,000
Max PriceCA$37.70

Ownership Breakdown


Management Team

  • Stephen Sadler (68yo)

    Executive Chairman & CEO

    • Tenure: 19.5yrs
    • Compensation: CA$4.61m
  • Vince Mifsud (51yo)

    President

    • Tenure: 1.8yrs
    • Compensation: CA$1.93m
  • Douglas Bryson

    VP of Finance & Administration and Corporate Secretary

    • Tenure: 0yrs
    • Compensation: CA$285.46k
  • Michael Stubbing (61yo)

    Managing Director of West & Northern Europe

    • Tenure: 0yrs
    • Compensation: CA$323.36k
  • Sam Anidjar

    Vice President of Corporate Development

    • Tenure: 0yrs
  • Todd May

    VP & General Counsel

    • Tenure: 0yrs
    • Compensation: CA$263.55k
  • Christoph Mosing

    President of Global Cloud Interactive Management Division (USA)

    • Tenure: 0yrs
    • Compensation: CA$293.83k
  • Geoff Bartle

    Vice President of Corporate Information Systems

    • Tenure: 0yrs
  • Lynette Corbett

    Chief Administration & Human Resources Officer

    • Tenure: 2.5yrs
  • Sunil Diaz

    General Manager of Networks Division

    • Tenure: 0yrs
    • Compensation: CA$291.82k

Board Members

  • Eric Demirian (60yo)

    Independent Director

    • Tenure: 15.6yrs
    • Compensation: CA$140.00k
  • Stephen Sadler (68yo)

    Executive Chairman & CEO

    • Tenure: 19.5yrs
    • Compensation: CA$4.61m
  • Pierre Lassonde (71yo)

    Lead Director

    • Tenure: 0yrs
    • Compensation: CA$130.00k
  • Reid Drury

    Independent Director

    • Tenure: 19.5yrs
    • Compensation: CA$125.00k
  • Paul Stoyan (60yo)

    Outside Director

    • Tenure: 13.2yrs
    • Compensation: CA$125.00k
  • Jane Mowat

    Director

    • Tenure: 0.6yrs
  • John Gibson

    Independent Director

    • Tenure: 15.6yrs
    • Compensation: CA$125.00k

Company Information

Enghouse Systems Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Enghouse Systems Limited
  • Ticker: ENGH
  • Exchange: TSX
  • Founded: 1984
  • Industry: Application Software
  • Sector: Software
  • Market Cap: CA$1.976b
  • Shares outstanding: 54.69m
  • Website: https://www.enghouse.com

Number of Employees


Location

  • Enghouse Systems Limited
  • 80 Tiverton Court
  • Suite 800
  • Markham
  • Ontario
  • L3R 0G4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ENGHTSX (The Toronto Stock Exchange)YesCommon SharesCACADFeb 1998
EGHS.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDFeb 1998
30000DB (Deutsche Boerse AG)YesCommon SharesDEEURFeb 1998

Biography

Enghouse Systems Limited develops and sells enterprise oriented applications software worldwide. It operates through two segments, Interactive Management Group and Asset Management Group. The Interactive M ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 23:33
End of Day Share Price2019/10/11 00:00
Earnings2019/07/31
Annual Earnings2018/10/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.