DATA COMMUNICATIONS MANAGEME (DCM.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:DCM - CA23761M1023 - Common Stock
1.77 CAD
-0.04 (-2.21%)
Taking everything into account, DCM scores 6 out of 10 in our fundamental rating. DCM was compared to 24 industry peers in the Commercial Services & Supplies industry. DCM has an excellent profitability rating, but there are concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on DCM.
1. Profitability
1.1 Basic Checks
- DCM had positive earnings in the past year.
- In the past year DCM had a positive cash flow from operations.
- Of the past 5 years DCM 4 years were profitable.
- DCM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of DCM (2.86%) is better than 62.50% of its industry peers.
- The Return On Equity of DCM (26.86%) is better than 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.
- 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 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
- Looking at the Profit Margin, with a value of 2.31%, DCM is in line with its industry, 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 better Operating Margin (8.41%) than 70.83% of its industry peers.
- DCM's Operating Margin has improved in the last couple of years.
- DCM has a Gross Margin of 26.53%. This is comparable 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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so DCM is creating value.
- The number of shares outstanding for DCM has been increased compared to 1 year ago.
- The number of shares outstanding for DCM has been increased compared to 5 years ago.
- DCM has a worse debt/assets ratio than last year.
2.2 Solvency
- DCM has an Altman-Z score of 1.00. This is a bad value and indicates that DCM is not financially healthy and even has some risk of bankruptcy.
- DCM has a Altman-Z score (1.00) which is in line with 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.
- 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/WACC1.38
WACC6.42%
2.3 Liquidity
- A Current Ratio of 1.76 indicates that DCM should not have too much problems paying its short term obligations.
- DCM has a better Current ratio (1.76) 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.
- Looking at the Quick ratio, with a value of 1.47, DCM is in the better half of the industry, outperforming 70.83% of the companies in the same industry.
| 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.
- The Earnings Per Share has been growing by 22.16% on average over the past years. This is a very strong growth
- The Revenue has decreased by -7.01% in the past year.
- DCM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.15% yearly.
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-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
- DCM is valuated reasonably with a Price/Earnings ratio of 8.85.
- Based on the Price/Earnings ratio, DCM is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
- DCM's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.30.
- The Price/Forward Earnings ratio is 8.48, which indicates a very decent valuation of DCM.
- DCM's Price/Forward Earnings ratio is rather cheap when compared to the industry. DCM is cheaper than 95.83% of the companies in the same industry.
- DCM is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.85 | ||
| Fwd PE | 8.48 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, DCM is valued cheaper than 95.83% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, DCM is valued cheaper than 91.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.28 | ||
| EV/EBITDA | 5.42 |
4.3 Compensation for Growth
- The excellent profitability rating of DCM 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
- DCM has a Yearly Dividend Yield of 5.24%, which is a nice return.
- 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.
- 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 | 5.24% |
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.