This 4.5% Dividend Stock Looks Ready to Take Off

OpenText stock pays a 4.5% dividend and just posted strong Q4 results. Here’s why this Canadian dividend stock deserves a look now.

Aditya Raghunath

Aditya Raghunath joined the Motley Fool Canada team in 2019 and has close to seven years of experience in covering publicly-listed companies. With a post-graduate degree in finance, Aditya aims to educate and engage Canadians by writing extensively about growth, dividend, and value stocks. If you are considering investing in the stock market, he recommends reading The Intelligent Investor by Benjamin Graham before taking the plunge.

Published August 10, 8:30 pm EDT

If you want a Canadian dividend stock that pays you a tasty dividend while you wait for share prices to rebound, OpenText (TSX:OTEX) deserves a spot on your watch list.

The Waterloo, Ontario-based data management company just closed out fiscal 2026 with a strong fourth quarter (Q4), and management laid out a credible plan to accelerate growth in the year ahead.

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A Canadian dividend stock built on data

OpenText has been paying investors a dividend since 2013. Since then, it has returned more than US$2.2 billion to shareholders through dividends.

The Canadian tech stock has raised the annual dividend payout from US$0.30 per share in 2013 to US$1.12 per share in 2026. Down 55% from all-time highs, OTEX stock offers shareholders a tasty dividend yield of 4.5% in August 2026.

The board just declared a quarterly dividend of US$0.28 per share, payable Sept. 18, 2026, to shareholders of record on Sept. 4, 2026. Moreover, OpenText bought back and canceled about 14.8 million shares in fiscal 2026, or 6% of its outstanding common shares, which should drive future earnings per share higher.

Total revenue for the fiscal fourth quarter (ended in June) rose 2.9% year over year to US$1.35 billion. Core revenue, the part of OpenText that management wants investors to focus on, grew 5.3% to US$1.05 billion. Cloud revenue within that core business grew even faster, up 10.7% to US$341 million.

Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin improved to 37.1% in Q4, while adjusted earnings rose 26% to $1.23 per share.

GAAP (generally accepted accounting principles) net income jumped nearly 440% year over year to US$156 million, helped by lower costs, currency gains, and proceeds from the sale of non-core businesses.

Operating cash flow in fiscal 2025 rose 21.2% to US$1 billion, while free cash flow surged 17.5% to US$808 million, allowing OpenText to repay US$649 million in debt. Its net leverage dropped from 3.02 times to 2.75 times, within the company’s target range.

With an annual dividend expense of US$265 million, OTEX stock has a payout ratio of just over 30%, which is sustainable.

The AI angle behind the growth plan

OpenText is positioning itself as the trusted data layer for AI systems. CEO Ayman Antoun emphasized.

“There’s not a single language model. There’s not a single agent. There’s not a single application that can function and give the client the output and the outcome they want without data and a data foundation,” Antoun said.

That pitch is showing up in the numbers.

Deals that include OpenText’s Aviator AI agents are four times larger than deals without them, and the number of deals featuring Aviator has more than doubled every year since the product launched eight quarters ago.
OpenText recently announced a €105 million investment in Ireland that will create 400 new jobs focused on agentic AI, cybersecurity, and sovereign cloud capabilities for European clients.
Antoun also confirmed the company is adding more than 300 new quota-carrying sales colleagues worldwide and reinvesting in its partner ecosystem, including hyperscalers and system integrators such as SAP.

Combined with reallocated research and development spending, this points toward a fiscal 2027 built for acceleration rather than just maintenance.

Should you buy OpenText stock now?

Fiscal 2027 guidance calls for core revenue growth of 2% to 3% in constant currency, with core cloud revenue growing 8% to 10%. Free cash flow guidance sits between US$625 million and US$725 million, enough to keep funding both the dividend and continued debt reduction.

Management expects every one of its four core business categories, content, business network, cybersecurity, and IT operations management, to grow this year.

A profitable, cash-generative business trading with a dividend yield near 4.5%, a shrinking debt load, and a genuine AI growth story that is showing up in deal sizes and bookings is not something investors find often.

For Canadian investors looking for income today and upside tomorrow, OpenText looks like a stock worth owning before the market catches on.