I think it's worth considering whether the MNF Group Ltd (ASX: MNF) share price is a buy today.
MNF Group is a software and telecommunications business, it's a major voice over internet protocol (VoIP) player.
Today MNF was finally able to announce the completion of the acquisition of the operating businesses of Inabox Group Ltd (ASX: IAB). It provides wholesale services in a wide range of voice, data and mobile aggregation services to over 500 providers. MNF said there are strong technical and customer synergies with IAB.
Is MNF worth looking at?
Over the past six years the MNF share price is up over 300%, despite falling by 42% since the start of 2018.
Investors who just think of MNF as a replacement to copper line telephones are missing the bigger picture. MNF is working with some of the most recognisable global technology names including Uber and Skype.
MNF thinks there are a number of drivers that could increase demand for its products to gain traction including the shift to the NBN and smaller businesses shifting to cloud options.
MNF has a reputation for quality and product capability, that's why existing clients are asking for MNF to grow – this is good news for the Singapore expansion that MNF is currently doing.
The company has a number of growth avenues including expanding into new geographies, new software, winning market share and new wholesale partnerships. The occasional acquisition will help too.
Foolish takeaway
Investors seemed unimpressed despite management estimating that earnings per share (EPS) could grow by at least 25% between FY18 and FY20. Incidentally, the dividend could also grow by a similar percentage if the payout ratio is kept at the same percentage.
That means MNF Group is trading at only 19x FY20's estimated earnings with a grossed-up dividend yield of 3.1%. This looks very attractive to me and I think it's one for the watchlist.
