The Company in a Nutshell
- Since its creation in 1991, the company has successfully performed dozens of mergers and acquisitions.
- OTEX is diversified across 100,000 clients, with 41% of its sales coming outside the Americas.
- Growth-oriented techno companies rarely focus on sharing profits. OTEX paid its first dividend in 2013.
- Download PDF format (Last reviewed: Nov 11th 2019)
|PRO Rating||4||Dividend Yield||1.44%|
|Dividend Safety||4||Dividend Growth Since||2014|
|DDM Valuation||-25.02%||Dividend Frequency||Quarterly|
Imagine a big business that employs 100 people and keeps growing. Each day, tons of information is collected about products, sales, employees, expenses, contracts, etc. This information is piling up in mountains of unreadable reports. It needs a solution to receive, integrate and digest this data. This is called Enterprise Information Management (EIM) system. EIM helps managers make better decisions by organizing the information to access it rapidly, understand it and trust it. OTEX is a leader in the industry and Canada’s largest one. It helps over 100,000 customers to share, store, retrieve and analyze their company’s information.
|General Information||GE Data|
|Expected Earnings Date||2020-05-01|
|Next ex-dvd date||2020-02-27|
Big data, cloud, and security. Three keywords you are not done hearing about. As we evolve through an era of consolidation; businesses grow larger every second. Managing growth is one thing, but dealing with the enormous amount of data this growth is bringing inside each company is part of Hercules’ labors. Enterprise Information Management (EIM) systems have been developed to manage this issue, and OpenText happens to be one of the leaders in this emerging business.
|5-Yr Rev. Growth:||16.92%|
|5-Yr EPS Growth:||7.70%|
|5-Yr Div Growth:||20.15%|
Open Text evolves in a changing environment and is continuously one iteration away from being obsolete. Several competitors also lurk to grab OTEX clients. Many are larger U.S. companies with more resources. OTEX built a strong name and there is a switching cost for clients, but it is not impossible that OTEX stops being the flavor of the month. Plus, OTEX is condemned to grow by acquisitions. With several transactions under its belt, it doesn’t seem like a problem. However, this could lead to hectic quarters.
|Financial Debt to EBITDA (TTM)||2.58|
|Current Ratio (Quarterly)||0.62|
|Free Cash Flow (Quarterly)($B)||0.248|
Dividend Growth Perspective
OTEX shows a low yield but its growth policy is quite aggressive. OTEX will be surfing on strong tailwinds for several years. OTEX has built a business model generating consistent cash flow (recurring revenues through subscriptions). This will support dividend payment (and increases) for a while. As the company continues its quest for growth, expect a double-digit dividend growth policy for several years to come.
|Payout Ratio (%)||55.51%|
|Cash Payout Ratio (%)||22.95%|
|Enter Expected Dividend Growth Rate Years 1-10:||12.00%|
|Enter Expected Terminal Dividend Growth Rate:||7.00%|
|Calculated Intrinsic Value OUTPUT 15-Cell Matrix||Metric2||Metric3||Metric4|
|Discount Rate (Horizontal)||Discount Rate (Horizontal)||Discount Rate (Horizontal)|
|Margin of Safety||9.00%||10.00%||11.00%|
|Market Cap ($)||17B|
|Price to Book Ratio||3.22|
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- Dividend triangle chart is updated every 6 months.
- All other metrics are updated every 5 minutes (price) or weekly.
- The PDF format includes only comments (no metrics) and are reviewed every 6 months.