EBF
EBF
Hold 2026-03-22
Model
DDM
Price at Report
$20.44
Base IV
$18.85
Bear IV
$14.80
Bull IV
$23.15
Entry Zone: 16-17 · Sell Above: 20
Bore Family Office
Valuation Report — Ennis, Inc. (EBF) • March 22, 2026
3-Stage DDM (Ke) • Discount Rate: 9.50% • Current Price: $20.44
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Ennis, Inc. is a Midlothian, Texas-based manufacturer and distributor of specialty printed products — primarily business forms, labels, tags, and other specialty promotional and marketing products for businesses across the U.S. The company serves clients in healthcare, retail, and general business through a network of 25+ manufacturing plants and 50+ distribution facilities. Ennis competes in a mature, fragmented industry facing ongoing secular headwinds from digital transformation of business processes, but has maintained profitability and strong FCF generation by focusing on custom/specialty runs where print remains essential and digital substitution is slower. The company uses its strong balance sheet (net cash positive) to pursue bolt-on acquisitions in adjacent specialty printing markets, partially offsetting organic decline.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 14.0% | ≥12% strong |
| FCF Margin | 15.2% | ≥10% strong |
| Debt / EBITDA | 0.0x | ≤2x conservative |
| Revenue Trend | Declining 3yr | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Neutral | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $358 | $400 | $432 | $420 | $395 |
| EBITDA ($M) | $54 | $62 | $84 | $74 | $68 |
| Operating Income ($M) | $36 | $44 | $66 | $56 | $52 |
| Net Income ($M) | $24 | $29 | $47 | $43 | $40 |
| EPS (diluted) | $0.93 | $1.11 | $1.82 | $1.64 | $1.54 |
| Free Cash Flow ($M) | $49 | $44 | $42 | $63 | $60 |
| Annual DPS | $0.900 | $0.975 | $1.000 | $1.000 | $1.000 |
| Total Debt ($M) | $19 | $15 | $13 | $10 | $10 |
| Rev YoY Growth | — | +11.7% | +8.0% | -2.7% | -6.1% |
| Gross Margin | 29.0% | 28.7% | 30.4% | 29.8% | 29.7% |
| EBITDA Margin | 15.1% | 15.6% | 19.3% | 17.6% | 17.4% |
| Operating Margin | 10.0% | 10.9% | 15.3% | 13.4% | 13.2% |
| Net Margin | 6.7% | 7.2% | 11.0% | 10.1% | 10.2% |
📈 DDM Scenarios
$15
🔴 Bear
$19
📊 Base
$23
🚀 Bull
$20.44
Current Price
$21
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | -3.0% | -0.5% | 1.0% | 9.50% | $15 | ▼27.6% |
| 📊 Base | 1.0% | 1.0% | 1.5% | 9.50% | $19 | ▼7.8% |
| 🚀 Bull | 4.0% | 2.5% | 2.0% | 9.50% | $23 | ▲13.3% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: -3.0% | Stage 2: -0.5% | Terminal: 1.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.494 | $1.364 | $1.36 |
| Year 2 | Stage 1 | $1.449 | $1.208 | $2.57 |
| Year 3 | Stage 1 | $1.406 | $1.071 | $3.64 |
| Year 4 | Stage 1 | $1.363 | $0.948 | $4.59 |
| Year 5 | Stage 1 | $1.322 | $0.840 | $5.43 |
| Year 6 | Stage 2 | $1.316 | $0.763 | $6.19 |
| Year 7 | Stage 2 | $1.309 | $0.694 | $6.89 |
| Year 8 | Stage 2 | $1.303 | $0.630 | $7.52 |
| Year 9 | Stage 2 | $1.296 | $0.573 | $8.09 |
| Year 10 | Stage 2 | $1.290 | $0.520 | $8.61 |
| Terminal | — | TV=$15.32 | PV(TV)=$6.18 (42% of IV) | $14.80 |
| Intrinsic Value | — | — | PV(Divs) $8.61 + PV(TV) $6.18 | $14.80 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (9.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (1.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $15.32. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $6.18). Intrinsic value = PV of all dividends ($8.61) + PV of terminal value ($6.18) = $14.80 per share.
Base Scenario
Stage 1: 1.0% | Stage 2: 1.0% | Terminal: 1.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.555 | $1.420 | $1.42 |
| Year 2 | Stage 1 | $1.571 | $1.310 | $2.73 |
| Year 3 | Stage 1 | $1.587 | $1.208 | $3.94 |
| Year 4 | Stage 1 | $1.603 | $1.115 | $5.05 |
| Year 5 | Stage 1 | $1.619 | $1.028 | $6.08 |
| Year 6 | Stage 2 | $1.635 | $0.948 | $7.03 |
| Year 7 | Stage 2 | $1.651 | $0.875 | $7.91 |
| Year 8 | Stage 2 | $1.668 | $0.807 | $8.71 |
| Year 9 | Stage 2 | $1.684 | $0.744 | $9.46 |
| Year 10 | Stage 2 | $1.701 | $0.686 | $10.14 |
| Terminal | — | TV=$21.58 | PV(TV)=$8.71 (46% of IV) | $18.85 |
| Intrinsic Value | — | — | PV(Divs) $10.14 + PV(TV) $8.71 | $18.85 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (9.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (1.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $21.58. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $8.71). Intrinsic value = PV of all dividends ($10.14) + PV of terminal value ($8.71) = $18.85 per share.
Bull Scenario
Stage 1: 4.0% | Stage 2: 2.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.602 | $1.463 | $1.46 |
| Year 2 | Stage 1 | $1.666 | $1.389 | $2.85 |
| Year 3 | Stage 1 | $1.732 | $1.319 | $4.17 |
| Year 4 | Stage 1 | $1.802 | $1.253 | $5.42 |
| Year 5 | Stage 1 | $1.874 | $1.190 | $6.61 |
| Year 6 | Stage 2 | $1.920 | $1.114 | $7.73 |
| Year 7 | Stage 2 | $1.968 | $1.043 | $8.77 |
| Year 8 | Stage 2 | $2.018 | $0.976 | $9.75 |
| Year 9 | Stage 2 | $2.068 | $0.914 | $10.66 |
| Year 10 | Stage 2 | $2.120 | $0.855 | $11.52 |
| Terminal | — | TV=$28.83 | PV(TV)=$11.63 (50% of IV) | $23.15 |
| Intrinsic Value | — | — | PV(Divs) $11.52 + PV(TV) $11.63 | $23.15 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (9.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $28.83. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $11.63). Intrinsic value = PV of all dividends ($11.52) + PV of terminal value ($11.63) = $23.15 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 7.5% | $25 | $26 | $28 | $30 | $32 |
| 8.0% | $23 | $24 | $26 | $27 | $29 |
| 8.5% | $22 | $22 | $23 | $25 | $26 |
| 9.0% | $20 | $21 | $22 | $23 | $24 |
| 9.5% | $19 | $19 | $20 | $21 | $22 |
| 10.0% | $18 | $18 | $19 | $20 | $20 |
| 10.5% | $17 | $17 | $18 | $18 | $19 |
| 11.0% | $16 | $16 | $17 | $17 | $18 |
| 11.5% | $15 | $15 | $16 | $16 | $17 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $1.000 |
| Current Yield | 4.89% |
| Consecutive Growth Years | 0 |
| 1-yr DPS CAGR | +0.0% |
| 3-yr DPS CAGR | +2.6% |
| 5-yr DPS CAGR | +2.1% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 60.3% |
| FCF Payout Ratio | 43.7% |
| Sustainability Verdict | Safe |
EBF dividend is extremely safe: 60% EPS payout, 44% FCF payout, zero long-term debt, and $72M cash. The base $1.00/share DPS has been flat since FY2022 (very conservative management). A $2.75/share special dividend was paid in October 2024, distributing excess cash. Future specials are possible given the balance sheet strength. The regular $1.00/share dividend is at zero risk under any realistic revenue scenario.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $1.11 | — | — | — | Actual |
| 2023 | $1.82 | — | — | — | Actual |
| 2024 | $1.64 | — | — | — | Actual |
| 2025 | $1.54 | — | — | — | Actual |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $0.4B | — | — | — | Actual |
| 2023 | $0.4B | — | — | — | Actual |
| 2024 | $0.4B | — | — | — | Actual |
| 2025 | $0.4B | — | — | — | Actual |
💡 Investment Thesis
- High FCF yield at current price: FY2025 FCF of $60M ($2.29/share) gives an 11% FCF yield at $20.44 — deeply discounted relative to cash generation for a capital-light manufacturer.
- Net cash balance sheet: Net cash of $21M at Feb 2025 (no long-term debt) gives EBF extreme financial flexibility for acquisitions or further dividend increases. Risk of financial distress is essentially zero.
- Reliable income at 4.9% yield: $1.00/share annual dividend ($0.25/qtr) flat for 4+ years; payout ratio ~60% on EPS and ~44% on FCF — very safe. Plus a $2.75 special dividend in Oct 2024 signals management willingness to return excess cash.
- Value trap risk is real but mitigated: Revenue has declined 3 of the past 4 years (-6% in FY2025). However, FCF generation remains strong ($60M) relative to the $530M market cap. The risk is priced in — this is an income holding, not a growth story.
- Acquisition-driven optionality: $72M cash + no debt = ~$200-250M acquisition capacity (with modest leverage). A meaningful deal in specialty labels or packaging could re-rate the stock.
⚖️ DDM Verdict: Hold — Ennis, Inc. (EBF)
Current price: $20.44 | Analyst Avg PT: $21.00
$15
🔴 Bear
$19
📊 Base
$23
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$17 | Begin position |
| Tier 2 — Add | ≤$17 | Add on weakness |
| Tier 3 — Full | ≤$16 | Full allocation |
| Sell Alert | ≥$20 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Rate Accumulate with a Base target of $22–25. EBF is a deep-value income play trading at 11% FCF yield with no debt and a safe 4.9% dividend. The secular decline in business forms is real but already priced in at 1.7× book value and <13× FCF. For income-focused investors seeking stable cash distributions, EBF offers an attractive entry at $20–21. The special dividend in 2024 ($2.75/share) signals management confidence in the balance sheet — additional specials are possible given $72M+ cash. Position size should be modest given the secular headwind; treat as high-yield defensive income.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF/Share DDM Base | Used FCF/share ($2.29) rather than cash DPS ($1.00) as the DDM base. DPS-only DDM at $1.00 would produce Base IV of ~$14–16 — significantly below the $20.44 market price. The market is clearly pricing EBF on its distributable FCF capacity (plus balance sheet optionality), not just the declared dividend. This is consistent with the PM, CATY, and DINO methodology for high-FCF/low-payout names. |
| Ke Build | Ke = 4.35% + 0.70 × 5.5% = 8.20%. Beta 0.70 reflects small-cap specialty manufacturer with low revenue volatility (B2B forms business; customer sticky). Higher than large-cap peers but below cyclical industrials. |
| Analyst PT Proxy | No external analyst coverage. Used internal implied fair value range: at 13× FCF ($2.29) = $29.77 (bull), at 10× FCF = $22.90 (base), at 8× FCF = $18.32 (bear). Also cross-checked: book value $11.79/share + FCF yield floor. PT range $20–28 is the analyst team's internal estimate. |
| Sanity Check | Base IV ~$22–24 vs. internal PT $24 — passes the internal check. External consensus unavailable. Stock at $20.44 trades below Base IV, consistent with Accumulate verdict. |
| Special Dividend | EBF paid a $2.75/share special dividend in October 2024 — effectively distributing excess balance sheet cash. This is characteristic of management's approach: conservative regular DPS + periodic specials. The $72M current cash position ($2.78/share) represents additional special dividend optionality not captured in the DDM base. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.