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. DCM has an excellent profitability rating, but 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
- 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.
- Each year in the past 5 years DCM had a positive operating cash flow.
1.2 Ratios
- With a decent Return On Assets value of 2.86%, DCM is doing good in the industry, outperforming 62.50% of the companies in the same industry.
- The Return On Equity of DCM (26.86%) is better than 91.67% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 8.84%, DCM belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
- DCM had an Average Return On Invested Capital over the past 3 years of 13.16%. This 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
- With a Profit Margin value of 2.31%, DCM perfoms like the industry average, outperforming 58.33% of the companies in the same industry.
- DCM's Profit Margin has improved in the last couple of years.
- DCM has a Operating Margin of 8.41%. This is in the better half of the industry: DCM outperforms 70.83% of its industry peers.
- In the last couple of years the Operating Margin of DCM has grown nicely.
- DCM has a Gross Margin (26.53%) which is comparable to the rest of the industry.
- DCM's Gross Margin has improved in the last couple of years.
| 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.
- Compared to 1 year ago, DCM has more shares outstanding
- The number of shares outstanding for DCM has been increased compared to 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 0.99, we must say that DCM is in the distress zone and has some risk of bankruptcy.
- DCM has a Altman-Z score of 0.99. This is comparable to the rest of the industry: DCM outperforms 41.67% of its industry peers.
- 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.
- 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
- 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.
- 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.
- DCM has a better Quick ratio (1.47) 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.
- Looking at the last year, DCM shows a decrease in Revenue. The Revenue has decreased by -7.01% in the last 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
- The Earnings Per Share is expected to grow by 38.29% on average over the next years. This is a very strong growth
- Based on estimates for the next years, DCM will show a decrease in Revenue. The Revenue will decrease by -0.34% on average per year.
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
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- 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.
- 100.00% of the companies in the same industry are more expensive than DCM, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of DCM to the average of the S&P500 Index (28.82), we can say DCM is valued rather cheaply.
- A Price/Forward Earnings ratio of 8.11 indicates a reasonable valuation of DCM.
- 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.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.95, 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.
- 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 | 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.
- DCM's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| 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.