Today I'm reviewing a small-cap software-application firm.

It's name is Magic Software Enterprises, Inc.

It's trading ticker symbol is MGIC. 

I previously reviewed this stock in an April 17th report.

Magic Software Enterprises Ltd is a software development company. It does application development, business process integration platforms, vertical software solutions and professional services to develop mobile and cloud-based business applications, namely software for business.

It serves oil and gas, telecommunications, financial, healthcare, industrial sectors, as well as 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 founded in 1983 and is headquartered in Or Yehuda, Israel.

I use three key data points to gauge the value of any dividend equity or fund like Magic Software Enterprises, Inc.: 

(1) Price

(2) Dividends

(3) Returns

After those three, four more keys are used to finally unlock an equity or fund in which to invest.

However, those first three primary keys, best tell whether a company has made, is making, and will make money. 

MGIC Price

Magic's price per share was $8.45 at yesterday's market close. A year ago its price was $7.90 for a gain of $0.55 per share.  

Assuming Magic's price will trade in the range of $7.50 to $9.50 again next year, its price could grow by that $0.55 again from it current $8.45 to $9.00 by July 2019. 

MGIC Dividends

Magic's most recent variable semi-annual dividend was $0.13 paid March 26. 

That recent payout pegs the annual take at $0.26 for a yield of 3.08% at yesterday's $8.45 share price. 

Gains For MGIC?

Adding the $0.26 annual dividend to the $0.55 potential year over year price gain makes a $0.81 projected gross annual per share gain, which will be reduced by any cost to trade these shares.  

A little under $1,000.00 invested today at the $8.45 price buys 118 shares. 

A $10 broker fee paid half at purchase and half at sale costs about $0.085 per share

Subtracting that $0.085 brokerage cost from the estimated $0.81 gross gain leaves a net gain of $0.725 X 118 shares 

= $85.55

or a 8.6% net gain on a $997.10 investment.

Therefore, Magic Software Enterprises, Inc. (whose ticker symbol is MGIC), now shows a possible 8.6% net gain including a 3.08% dividend yield. 

Three analysts cover this stock:

One says "buy" MGIC.

Two say MGIC will "outperform" its peers.

Their three-analyst consensus recommendation adds up to 1.7 or "outperform" and their median price target is just $1.25 higher than my $9.00 year over year estimate

Y Charts has rated MGIC "neutral' for an overall "Y" rating. Y Charts rates MGIC "good" for a Value score and "strong" for a Fundamental reading and gives a  Historic Valuation score for MGIC of "7.12% undervalued" per a Y Charts rating based on a $9.10 price calculation.

You could look at all those numbers this way, Magic Software Enterprises, Inc. has made money, is making money, and could net a 8.6% gain next year including a 3.08% annual dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. Actual results remain to be seen. Results could turn out to be far higher or lower. More study is required for you to determine if Magic Software Enterprises, Inc. is worth your time and money.