DATA COMMUNICATIONS MANAGEME (DCM.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:DCM - CA23761M1023 - Common Stock
1.76 CAD
-0.01 (-0.56%)
We assign a fundamental rating of 6 out of 10 to DCM. DCM was compared to 24 industry peers in the Commercial Services & Supplies industry. While DCM belongs to the best of the industry regarding profitability, there are concerns on its financial health. DCM is valued quite cheap, while showing a decent growth score. This is a good combination!
1. Profitability
1.1 Basic Checks
- DCM had positive earnings in the past year.
- DCM had a positive operating cash flow in the past year.
- DCM had positive earnings in 4 of the past 5 years.
- In the past 5 years DCM always reported a positive cash flow from operatings.
1.2 Ratios
- DCM has a Return On Assets of 2.86%. This is in the better half of the industry: DCM outperforms 62.50% of its industry peers.
- DCM has a Return On Equity of 26.86%. This is amongst the best in the industry. DCM outperforms 91.67% of its industry peers.
- With an excellent Return On Invested Capital value of 8.84%, DCM belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for DCM is significantly above the industry average of 5.81%.
- The last Return On Invested Capital (8.84%) for DCM is well below the 3 year average (13.16%), which needs to be investigated, but indicates that DCM had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.86% | ||
| ROE | 26.86% | ||
| ROIC | 8.84% |
ROA(3y)2.16%
ROA(5y)2.92%
ROE(3y)4.98%
ROE(5y)29.88%
ROIC(3y)13.16%
ROIC(5y)12.14%
1.3 Margins
- DCM has a Profit Margin of 2.31%. This is comparable to the rest of the industry: DCM outperforms 58.33% of its industry peers.
- In the last couple of years the Profit Margin of DCM has grown nicely.
- With a decent Operating Margin value of 8.41%, DCM is doing good in the industry, outperforming 70.83% of the companies in the same industry.
- In the last couple of years the Operating Margin of DCM has grown nicely.
- DCM's Gross Margin of 26.53% is in line compared to the rest of the industry. DCM outperforms 54.17% of its industry peers.
- In the last couple of years the Gross Margin of DCM has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.41% | ||
| PM (TTM) | 2.31% | ||
| GM | 26.53% |
OM growth 3Y13.19%
OM growth 5Y62.33%
PM growth 3Y3.8%
PM growth 5YN/A
GM growth 3Y-2.84%
GM growth 5Y2.04%
2. Health
2.1 Basic Checks
- DCM has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- The number of shares outstanding for DCM has been increased compared to 1 year ago.
- DCM has more shares outstanding than it did 5 years ago.
- Compared to 1 year ago, DCM has a worse debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 1.00, we must say that DCM is in the distress zone and has some risk of bankruptcy.
- DCM has a Altman-Z score (1.00) which is comparable to the rest of the industry.
- The Debt to FCF ratio of DCM is 19.50, which is on the high side as it means it would take DCM, 19.50 years of fcf income to pay off all of its debts.
- DCM has a Debt to FCF ratio (19.50) which is in line with its industry peers.
- DCM has a Debt/Equity ratio of 6.09. This is a high value indicating a heavy dependency on external financing.
- The Debt to Equity ratio of DCM (6.09) is worse than 70.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.09 | ||
| Debt/FCF | 19.5 | ||
| Altman-Z | 1 |
ROIC/WACC1.37
WACC6.43%
2.3 Liquidity
- DCM has a Current Ratio of 1.76. This is a normal value and indicates that DCM is financially healthy and should not expect problems in meeting its short term obligations.
- DCM has a Current ratio of 1.76. This is in the better half of the industry: DCM outperforms 70.83% of its industry peers.
- A Quick Ratio of 1.47 indicates that DCM should not have too much problems paying its short term obligations.
- DCM has a Quick ratio of 1.47. This is in the better half of the industry: DCM outperforms 70.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.76 | ||
| Quick Ratio | 1.47 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 362.27% over the past year.
- DCM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.16% yearly.
- The Revenue has decreased by -7.01% in the past year.
- The Revenue has been growing by 11.15% on average over the past years. This is quite good.
EPS 1Y (TTM)362.27%
EPS 3Y22.16%
EPS 5YN/A
EPS Q2Q%137.2%
Revenue 1Y (TTM)-7.01%
Revenue growth 3Y26.82%
Revenue growth 5Y11.15%
Sales Q2Q%-3.09%
3.2 Future
- The Earnings Per Share is expected to grow by 38.29% on average over the next years. This is a very strong growth
- The Revenue is expected to decrease by -0.34% on average over the next years.
EPS Next Y-11.68%
EPS Next 2Y7.67%
EPS Next 3Y13.42%
EPS Next 5Y38.29%
Revenue Next Year-5.46%
Revenue Next 2Y-2.16%
Revenue Next 3Y-1.39%
Revenue Next 5Y-0.34%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 8.80 indicates a reasonable valuation of DCM.
- DCM's Price/Earnings ratio is rather cheap when compared to the industry. DCM is cheaper than 100.00% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.21. DCM is valued rather cheaply when compared to this.
- DCM is valuated reasonably with a Price/Forward Earnings ratio of 8.43.
- 95.83% of the companies in the same industry are more expensive than DCM, based on the Price/Forward Earnings ratio.
- DCM is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.8 | ||
| Fwd PE | 8.43 |
4.2 Price Multiples
- 95.83% of the companies in the same industry are more expensive than DCM, based on the Enterprise Value to EBITDA ratio.
- 91.67% of the companies in the same industry are more expensive than DCM, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.24 | ||
| EV/EBITDA | 5.42 |
4.3 Compensation for Growth
- DCM has an outstanding profitability rating, which may justify a higher PE ratio.
- DCM's earnings are expected to grow with 13.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y7.67%
EPS Next 3Y13.42%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 5.24%, DCM is a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 0.99, DCM pays a better dividend. On top of this DCM pays more dividend than 100.00% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, DCM pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.24% |
5.2 History
- DCM has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DPN/A
EPS Next 2Y7.67%
EPS Next 3Y13.42%
DATA COMMUNICATIONS MANAGEME / DCM.CA FAQ
Can you provide the ChartMill fundamental rating for DATA COMMUNICATIONS MANAGEME?
ChartMill assigns a fundamental rating of 6 / 10 to DCM.CA.
Can you provide the valuation status for DATA COMMUNICATIONS MANAGEME?
ChartMill assigns a valuation rating of 8 / 10 to DATA COMMUNICATIONS MANAGEME (DCM.CA). This can be considered as Undervalued.
How profitable is DATA COMMUNICATIONS MANAGEME (DCM.CA) stock?
DATA COMMUNICATIONS MANAGEME (DCM.CA) has a profitability rating of 8 / 10.
What is the earnings growth outlook for DATA COMMUNICATIONS MANAGEME?
The Earnings per Share (EPS) of DATA COMMUNICATIONS MANAGEME (DCM.CA) is expected to decline by -11.68% in the next year.