David Driscoll - BNN - TOP PICK ENGHOUSE SYSTEMS (ENGH CN)
The company is a software firm that has two businesses. Its Interactive Management Group provides interactive phone systems for banks, insurance companies, utilities, healthcare providers, high-tech and hospitality companies. Its asset management group develops geographic information systems (GIS) tracking software like RFID or barcode tracking used primarily for spatial asset management applications to the energy, telecommunications and utility industries.
The company has now become a SaaS company. Instead of selling the software, it offers companies to subscribe and pay an annual fee to access the software. This has helped improve margins and, in turn, profits. An indication of profit growth is the growth in the dividend which was raised 18 per cent for 2024. The company trades at 18 times 2026 expected earnings, offers a 3.5 per cent dividend yield, very little debt and a 15 per cent return on invested capital, well above its cost of capital.
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