02. Open Text Corporation (NASDAQ:OTEX)
Dividend Yield: 3.64%
Payout Ratio: 58.70%
Expected EPS growth for the next Five Years: 3.01%
Open Text Corporation (NASDAQ:OTEX) is quietly becoming one of the most compelling long term tech investments, especially for dividend focused investors. While Q3 2025 brought revenue slightly below expectations due to external tariff related disruptions, the company’s fundamentals remain rock solid, and its strategic pivot to AI first operations positions it well for the years ahead.
In Q3, Open Text Corporation (NASDAQ:OTEX) reported $1.27 billion in revenue, with cloud revenues growing for the 17th consecutive quarter, up 3% year over year in constant currency. Despite macro headwinds, the company generated a strong adjusted EBITDA of $395 million (a 31.5% margin) and record free cash flow of $374 million, up 7% YoY. Adjusted EPS rose to $0.83, while Open Text aggressively returned capital to shareholders, buying back 4.4 million shares worth $115 million.
What’s exciting is Open Text Corporation (NASDAQ:OTEX) deep integration of AI. With its Titanium X platform and new Aviator AI tools, the company is reimagining enterprise productivity, turning tasks that once took days into minutes. It’s not just a tech story; it’s a cost efficiency play. The company’s expanded optimization plan, powered by AI, is expected to generate $550 million in annualized savings, significantly boosting margins.
Investors can also take comfort in Open Text’s robust dividend program, targeting 50% of free cash flow toward dividends and buybacks. With nearly $1.23 billion in cash, growing partnerships with SAP and hyperscalers, and high renewal rates in cloud services, Open Text Corporation (NASDAQ:OTEX) is firing on all cylinders operationally.
For investors seeking a stable, high yield tech stock with long term growth upside from AI, cloud, and cybersecurity, Open Text Corporation (NASDAQ:OTEX) is a standout. Its Canadian roots offer geographic diversification, while its relentless focus on profitability makes it a top tier pick for 2025 and beyond.
