DOLLARAMA INC (DOL.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:DOL - CA25675T1075 - Common Stock
192.22 CAD
-0.76 (-0.39%)
DOL gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 3 industry peers in the Broadline Retail industry. DOL scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, DOL is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- DOL had positive earnings in the past year.
- DOL had a positive operating cash flow in the past year.
- DOL had positive earnings in each of the past 5 years.
- Each year in the past 5 years DOL had a positive operating cash flow.
1.2 Ratios
- DOL has a Return On Assets of 17.67%. This is amongst the best in the industry. DOL outperforms 100.00% of its industry peers.
- DOL's Return On Equity of 100.76% is amongst the best of the industry. DOL outperforms 100.00% of its industry peers.
- With an excellent Return On Invested Capital value of 21.54%, DOL belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for DOL is significantly above the industry average of 11.07%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.67% | ||
| ROE | 100.76% | ||
| ROIC | 21.54% |
ROA(3y)17.95%
ROA(5y)16.71%
ROE(3y)1062.04%
ROE(5y)N/A
ROIC(3y)22.87%
ROIC(5y)23.07%
1.3 Margins
- With an excellent Profit Margin value of 18.59%, DOL belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- DOL's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 24.63%, DOL belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- DOL's Operating Margin has improved in the last couple of years.
- DOL has a better Gross Margin (45.38%) than 100.00% of its industry peers.
- DOL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.63% | ||
| PM (TTM) | 18.59% | ||
| GM | 45.38% |
OM growth 3Y3.75%
OM growth 5Y1.7%
PM growth 3Y5.97%
PM growth 5Y4.12%
GM growth 3Y0.9%
GM growth 5Y0.68%
2. Health
2.1 Basic Checks
- DOL has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- DOL has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, DOL has less shares outstanding
- DOL has a better debt/assets ratio than last year.
2.2 Solvency
- DOL has an Altman-Z score of 6.93. This indicates that DOL is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 6.93, DOL belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- DOL has a debt to FCF ratio of 3.65. This is a good value and a sign of high solvency as DOL would need 3.65 years to pay back of all of its debts.
- DOL's Debt to FCF ratio of 3.65 is amongst the best of the industry. DOL outperforms 100.00% of its industry peers.
- DOL has a Debt/Equity ratio of 3.56. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 3.56, DOL is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.56 | ||
| Debt/FCF | 3.65 | ||
| Altman-Z | 6.93 |
ROIC/WACC2.72
WACC7.92%
2.3 Liquidity
- A Current Ratio of 1.09 indicates that DOL should not have too much problems paying its short term obligations.
- With a Current ratio value of 1.09, DOL is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
- A Quick Ratio of 0.23 indicates that DOL may have some problems paying its short term obligations.
- With a Quick ratio value of 0.23, DOL is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.23 |
3. Growth
3.1 Past
- DOL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.39%, which is quite good.
- The Earnings Per Share has been growing by 18.83% on average over the past years. This is quite good.
- The Revenue has grown by 14.02% in the past year. This is quite good.
- DOL shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.11% yearly.
EPS 1Y (TTM)19.39%
EPS 3Y23.76%
EPS 5Y18.83%
EPS Q2Q%19.39%
Revenue 1Y (TTM)14.02%
Revenue growth 3Y13.98%
Revenue growth 5Y11.11%
Sales Q2Q%22.19%
3.2 Future
- The Earnings Per Share is expected to grow by 15.26% on average over the next years. This is quite good.
- The Revenue is expected to grow by 9.00% on average over the next years. This is quite good.
EPS Next Y13.27%
EPS Next 2Y12.96%
EPS Next 3Y12.92%
EPS Next 5Y15.26%
Revenue Next Year13.1%
Revenue Next 2Y12.53%
Revenue Next 3Y10.59%
Revenue Next 5Y9%
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 41.07 indicates a quite expensive valuation of DOL.
- Based on the Price/Earnings ratio, DOL is valued a bit more expensive than 66.67% of the companies in the same industry.
- DOL is valuated expensively when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 36.12, the valuation of DOL can be described as expensive.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of DOL indicates a slightly more expensive valuation: DOL is more expensive than 66.67% of the companies listed in the same industry.
- DOL's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.07 | ||
| Fwd PE | 36.12 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, DOL is valued a bit more expensive than 66.67% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, DOL is valued a bit more expensive than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.68 | ||
| EV/EBITDA | 26.64 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of DOL may justify a higher PE ratio.
- A more expensive valuation may be justified as DOL's earnings are expected to grow with 12.92% in the coming years.
PEG (NY)3.09
PEG (5Y)2.18
EPS Next 2Y12.96%
EPS Next 3Y12.92%
5. Dividend
5.1 Amount
- DOL has a yearly dividend return of 0.22%, which is pretty low.
- Compared to an average industry Dividend Yield of 2.78, DOL is paying slightly less dividend.
- With a Dividend Yield of 0.22, DOL pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.22% |
5.2 History
- On average, the dividend of DOL grows each year by 15.08%, which is quite nice.
- DOL has paid a dividend for at least 10 years, which is a reliable track record.
- DOL has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)15.08%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
- 8.41% of the earnings are spent on dividend by DOL. This is a low number and sustainable payout ratio.
- DOL's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP8.41%
EPS Next 2Y12.96%
EPS Next 3Y12.92%
DOLLARAMA INC / DOL.CA FAQ
Can you provide the ChartMill fundamental rating for DOLLARAMA INC?
ChartMill assigns a fundamental rating of 6 / 10 to DOL.CA.
What is the valuation status of DOLLARAMA INC (DOL.CA) stock?
ChartMill assigns a valuation rating of 1 / 10 to DOLLARAMA INC (DOL.CA). This can be considered as Overvalued.
How profitable is DOLLARAMA INC (DOL.CA) stock?
DOLLARAMA INC (DOL.CA) has a profitability rating of 9 / 10.
What is the valuation of DOLLARAMA INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for DOLLARAMA INC (DOL.CA) is 41.07 and the Price/Book (PB) ratio is 40.54.
Can you provide the financial health for DOL stock?
The financial health rating of DOLLARAMA INC (DOL.CA) is 6 / 10.