Source: Unsplash 

Magic Software Enterprises Inc has the ticker symbol MGIC and is a small-cap member of the technology sector as an application software firm. This is my first report on Magic Software Enterprises Inc for this Vista folio. MGIC was selected for a previous DOTW portfolio.

Magic Software Enterprises Ltd is a software development company. The company's operating segment includes Software Services. 

It generates maximum revenue from the IT Professional Services segment. IT Professional Services segment offers advanced and flexible IT services in the areas of infrastructure design and delivery, application development, technology planning, and implementation services, communications services and solutions, as well as supplemental outsourcing services. 

Geographically, it derives a majority of revenue from the United States and also has a presence in Israel; Europe; Japan, and Other countries.

It serves oil and gas, telecommunications, financial, healthcare, and industrial sectors; and public institutions and international agencies. 

The company was formerly known as Mashov Software Export (1983) Ltd. and changed its name to Magic Software Enterprises Ltd. in 1991. Magic Software Enterprises Ltd. was incorporated in 1983 and is headquartered in Or Yehuda, Israel.

Three key data points gauge dividend equities or funds like Magic Software Enterprises Ltd:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether a company has made, is making, and will make money. 

MGIC Price

Magic's price per share closed at $16.08 yesterday. One year ago its price was $9.62. Thus, the price per share has grown over 67% as it recovered from last year's COVID market slump. 

Should Magic Software Enterprises Ltd stock trade in the range of $10 to $22.00 this next year, its recent $16.08 price might rise by $2.92 to reach $19.00 by May 18, 2022. My estimate is $1.00 lower of the median of three price estimates from analysts tracking MGIC. 

MGIC Dividends

Magic's most recent Semi-annual dividend of $0.21 is payable on April 7th. That equates to $0.42 annually with a yield of 2.61% at yesterday's $16.08 closing price. Magic Software Enterprises Ltd has paid variable semiannual dividends (generally increasing annually) since February 2003. 

MGIC Returns

Adding the $0.42 annual Magic Software Enterprises Ltd forward-looking dividend to my $2.92 price upside estimate shows a $3.34 potential gross gain, per share, to be reduced by any costs to trade the shares.  

If we put little under $1,000.00 today in MGIC  at $16.08 per share, we'd buy 62 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at a sale and might cost us about $0.16 per share.

Subtract that maybe $0.16 brokerage cost from my estimated $3.34 gross gain per share results in a net gain of $3.18 X 62 shares = $197.16 for a 19.7% net gain on a $996.96 investment.

So it is that Magic Software Enterprises Ltd shows a possible 19.7% net gain including a 2.61% forward-looking dividend yield. 

Over the next year at this time, a $1000 investment in MGIC could generate $26.10 in cash dividends. And a single share bought at yesterday's closing price was $18.08! So, if MGIC is your kind of application software investment, Magic Software Enterprises Ltd's share price is over $10 below the expected annual dividend income from $1,000 invested. This suggests now is a prime time to add Magic Software Enterprises Ltd to your holdings.  

All of the estimates above are speculation based on the past history of Magic Software Enterprises Ltd. Only time and money invested in this stock will determine its worth.