Enghouse Systems is Set to Be a Winning Play During COVID-19

Shares of Enghouse Systems Limited (TSX:ENGH) have gained 18% since being featured in the Capital Ideas Digest nearly six weeks ago

Capital Ideas Media | July 21, 2020 | SmallCapPower: We love to write about stock stories that seem to outperform over the long term, yet receive little or no media attention. We may have found one in Enghouse Systems Limited (TSX:ENGH).

(Originally published on Capital Ideas Media on June 9, 2020)

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Enghouse Systems develops and sells enterprise-oriented applications software worldwide. The Company operates through two main business segments: Interactive Management Group and Asset Management Group.

[Editor’s Note: Shares of Enghouse have appreciated 18% since Capital Ideas wrote about the stock nearly six weeks ago.]

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The Interactive Management Group segment provides customer interaction software and services. Its technologies include contact center, attendant console, interactive voice response, dialers, agent performance optimization, and analytics that support various telephony environments.

The Asset Management Group segment offers a portfolio of products to telecom service providers, utilities, and the oil and gas industry. Its products include operations support systems, business support systems, and mobile value-added services solutions, as well as data conversion services.

On June 4, 2020, Enghouse reported its second-quarter (unaudited) financial results for the period ended April 30, 2020, in which its revenue rose 58% year over year to $140.9 million and net income for the quarter increased 64% to $27.1 million.

Perhaps more important, though, the Company noted that COVID-19 has had positive financial impact on sales of its Vidyo remote conferencing and telehealth/financial services video platform, as well as its remote computing solutions.

During the past five years, Enghouse has grown its revenue at a 6.7% CAGR along with a 12.7% Dividend Per Share CAGR (ENGH stock has a current yield of 0.8%).

Enghouse Systems investors have enjoyed an average annual return of 30% over the past five years.

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