Evertz Technologies Limited Is Leading the Industry in Profits

Evertz Technologies Limited (TSX:ET) is leading the industry in profits with a margin of 18.15% and solid quarterly results.

| More on:

A company with great profit numbers often makes a good investment, and Evertz Technologies Limited (TSX:ET) is currently reporting industry-leading profit numbers.

Evertz, headquartered in Burlington, Ontario, is a global manufacturer of broadcast equipment and technologies for television, on-demand, and webTV services. Its technology helps with content creation and delivery.

What makes this company look good? 

Evertz currently has a profit margin of 18.15% — an industry leader. As a comparison, peers Avigilon Corp. (TSX:AVO) has a profit margin of only 3.56% and Baylin Technologies Inc. (TSX:BYL) has a profit margin of -7.63%. The stock has a good return-on-equity number of 20.22%, so the company is good at taking investor dollars and turning them into profit. And while competitors have struggled, this company is still doing well with its customers.

The company reported record quarterly revenue of $109 million, an increase of 25% year over year when it announced results on September 12. This exceeded the consensus forecast of $104 million. Even though expenses were higher than anticipated for Evertz, it still managed adjusted earnings per share of $0.28, just above expectations of $0.27 (although fully diluted earnings per share of $0.17 were lower than the same quarter last year). Earnings growth has averaged 2.68% annually over the last three years, which is better than the industry average of 0.30%.

The company has a good debt-to-net-equity ratio of 0.29, so the company has a lot more assets than liabilities, which bodes well for the future.

The stock is trading closer to its 52-week high of $18.73 than its low of $15.72. Analysts expect the stock to trade in the $19 range over the next 12 months, so there is room for only a little growth if they are right. For income investors, this stock offers a decent dividend yield of 3.87%. The quarterly dividend is $0.18 per share for an annual payout of $0.72 per share. This dividend has been steady since the end of 2014. The company has paid out occasional special cash dividends, the last one being $1.10 per share in 2016, which was on top of the annual total dividend of $0.72.

Bottom line

Things look rosy for Evertz right now, especially when taking into account that many of its peers are struggling. Profits look good, debt levels are low, and it pays a good dividend. If you are looking for a technology stock to add to your Foolish portfolio, Evertz deserves a second look.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Susan Portelance has no position in any stocks mentioned. Avigilon is a recommendation of Stock Advisor Canada.  

More on Dividend Stocks

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

golden sunset in crude oil refinery with pipeline system
Dividend Stocks

Best Stock to Buy Right Now: Enbridge vs TC Energy?

Enbridge and TC Energy rebounded nicely over the past year. Are more gains on the way?

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

2 Utility Stocks That Are Smart Buys for Canadians in November

Are you looking for some of the smart buys to consider in November? These utility stocks offer growth and a…

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Is Power Corporation of Canada Stock a Buy for its 5% Dividend Yield?

Is Power Corporation of Canada (TSX:POW) stock's 5% dividend yield worth it? Discover why this resilient stock could be a…

Read more »

hand stacks coins
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These three dividend stocks are ideal for strengthening your portfolio and earning a stable passive income.

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer REIT Stocks to Buy Right Now for Less Than $200

REITs have long been touted as some of the best dividend stocks out there if you want recurring, strong income.…

Read more »