DATA COMMUNICATIONS MANAGEME (DCM.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:DCM - CA23761M1023 - Common Stock
1.68 CAD
-0.02 (-1.18%)
Overall DCM gets a fundamental rating of 6 out of 10. We evaluated DCM against 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
- In the past year DCM was profitable.
- 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 better Return On Equity (26.86%) than 91.67% of its industry peers.
- DCM's Return On Invested Capital of 8.84% is amongst the best of the industry. DCM outperforms 87.50% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for DCM is significantly above the industry average of 5.81%.
- The 3 year average ROIC (13.16%) for DCM is well above the current ROIC(8.84%). The reason for the recent decline needs to be investigated.
| 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.
- DCM's Profit Margin has improved in the last couple of years.
- DCM's Operating Margin of 8.41% is fine compared to the rest of the industry. DCM outperforms 70.83% of its industry peers.
- DCM's Operating Margin has improved in the last couple of years.
- The Gross Margin of DCM (26.53%) is comparable to the rest of the industry.
- 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
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), DCM is creating value.
- Compared to 1 year ago, DCM has more shares outstanding
- 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
- DCM has an Altman-Z score of 0.99. This is a bad value and indicates that DCM is not financially healthy and even has some risk of bankruptcy.
- DCM's Altman-Z score of 0.99 is in line compared to the rest of the industry. DCM outperforms 41.67% of its industry peers.
- DCM has a debt to FCF ratio of 19.50. This is a negative value and a sign of low solvency as DCM would need 19.50 years to pay back of all of its debts.
- DCM has a Debt to FCF ratio (19.50) which is comparable to the rest of the industry.
- DCM has a Debt/Equity ratio of 6.09. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 6.09, DCM is doing worse than 70.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.09 | ||
| Debt/FCF | 19.5 | ||
| Altman-Z | 0.99 |
ROIC/WACC1.37
WACC6.46%
2.3 Liquidity
- A Current Ratio of 1.76 indicates that DCM should not have too much problems paying its short term obligations.
- The Current ratio of DCM (1.76) is better than 70.83% of its industry peers.
- DCM has a Quick Ratio of 1.47. This is a normal value and indicates that DCM is financially healthy and should not expect problems in meeting its short term obligations.
- The Quick ratio of DCM (1.47) is better than 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.
- Measured over the past years, DCM shows a quite strong growth in Revenue. The Revenue has been growing by 11.15% on average per year.
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
- DCM is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 38.29% yearly.
- DCM is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.34% yearly.
EPS Next Y-1.81%
EPS Next 2Y7.25%
EPS Next 3Y13.42%
EPS Next 5Y38.29%
Revenue Next Year-5.46%
Revenue Next 2Y-1.74%
Revenue Next 3Y-0.31%
Revenue Next 5Y-0.34%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 8.40, the valuation of DCM can be described as very reasonable.
- Compared to the rest of the industry, the Price/Earnings ratio of DCM indicates a rather cheap valuation: DCM is cheaper than 100.00% of the companies listed in the same industry.
- DCM is valuated cheaply when we compare the Price/Earnings ratio to 28.82, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 8.11, the valuation of DCM can be described as reasonable.
- DCM's Price/Forward Earnings ratio is rather cheap when compared to the industry. DCM is cheaper than 100.00% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of DCM to the average of the S&P500 Index (25.95), we can say DCM is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.4 | ||
| Fwd PE | 8.11 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DCM indicates a rather cheap valuation: DCM is cheaper than 95.83% of the companies listed in the same industry.
- DCM's Price/Free Cash Flow ratio is rather cheap when compared to the industry. DCM is cheaper than 91.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.91 | ||
| EV/EBITDA | 5.34 |
4.3 Compensation for Growth
- The excellent profitability rating of DCM may justify a higher PE ratio.
- A more expensive valuation may be justified as DCM's earnings are expected to grow with 13.42% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y7.25%
EPS Next 3Y13.42%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 5.65%, DCM is a good candidate for dividend investing.
- DCM's Dividend Yield is rather good when compared to the industry average which is at 1.00. DCM pays more dividend than 100.00% of the companies 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 | 5.65% |
5.2 History
- DCM has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DPN/A
EPS Next 2Y7.25%
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 -1.81% in the next year.