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  5. OTEX: Over the last few years OTEX has bottomed out @ +/- $35. [Open Text Corporation]
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Q: Over the last few years OTEX has bottomed out @ +/- $35.00 several times. Each time it has regained ground and reached the mid 50s or higher. There is currently a decent dividend of 4% so you get paid to wait. It seems to me that OTEX is a reasonable candidate for a swing trade. In the past 5i has made a few positive comments but has mostly remained unimpressed. Does OTEX have some fundamental problems and do you think the dividend is secure?
Asked by Mark on February 04, 2026
5i Research Answer:

We would not necessarily say it has fundamental issues, but there is general concern on how AI will impact the tech sector. Expected growth is fairly low, and debt is fairly high, which keeps OTEX's valuation very low (6x earnings). The dividend payout ratio is low at 30% which implies a good cushion. Still, debt can still make executives worry at times on a dividend. We would not expect a cut, though. OTEX has been optimizing its assets, and some divisions have been sold. It is also going through a CEO transition. So all in, we think it is 'OK' and not without potential. But there are risks (debt, acquisitions, execution).   also....it has been a value trap, and the current AI-eats-software meltdown is likely not going to help it turn anytime soon. 

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