DOLLARAMA INC (DOL.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:DOL - CA25675T1075 - Common Stock
186.36 CAD
-4.5 (-2.36%)
DOL gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 3 industry peers in the Broadline Retail industry. While DOL belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. DOL is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year DOL was profitable.
- DOL had a positive operating cash flow in the past year.
- In the past 5 years DOL has always been profitable.
- DOL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 17.67%, DOL belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- DOL's Return On Equity of 100.76% is amongst the best of the industry. DOL outperforms 100.00% of its industry peers.
- The Return On Invested Capital of DOL (21.54%) is better than 100.00% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital 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
- DOL has a Profit Margin of 18.59%. This is amongst the best in the industry. DOL outperforms 100.00% of its industry peers.
- In the last couple of years the Profit Margin of DOL has grown nicely.
- DOL's Operating Margin of 24.63% is amongst the best of the industry. DOL outperforms 100.00% of its industry peers.
- DOL's Operating Margin has improved in the last couple of years.
- The Gross Margin of DOL (45.38%) is better than 100.00% of its industry peers.
- In the last couple of years the Gross Margin of DOL has remained more or less at the same level.
| 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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so DOL 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 6.87. This indicates that DOL is financially healthy and has little risk of bankruptcy at the moment.
- With an excellent Altman-Z score value of 6.87, DOL belongs to the best 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 has a better Debt to FCF ratio (3.65) than 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.
- Looking at the Debt to Equity ratio, with a value of 3.56, DOL is doing worse than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.56 | ||
| Debt/FCF | 3.65 | ||
| Altman-Z | 6.87 |
ROIC/WACC2.71
WACC7.94%
2.3 Liquidity
- DOL has a Current Ratio of 1.09. This is a normal value and indicates that DOL is financially healthy and should not expect problems in meeting its short term obligations.
- DOL has a Current ratio of 1.09. This is in the lower half of the industry: DOL underperforms 66.67% of its industry peers.
- A Quick Ratio of 0.23 indicates that DOL may have some problems paying its short term obligations.
- DOL has a worse Quick ratio (0.23) than 66.67% of its industry peers.
| 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.
- Measured over the past years, DOL shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.83% on average per year.
- The Revenue has grown by 14.02% in the past year. This is quite good.
- The Revenue has been growing by 11.11% on average over the past years. This is quite good.
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
- DOL is valuated quite expensively with a Price/Earnings ratio of 39.82.
- Based on the Price/Earnings ratio, DOL is valued a bit more expensive than the industry average as 66.67% of the companies are valued more cheaply.
- DOL is valuated rather expensively when we compare the Price/Earnings ratio to 28.87, which is the current average of the S&P500 Index.
- DOL is valuated quite expensively with a Price/Forward Earnings ratio of 35.02.
- Based on the Price/Forward Earnings ratio, DOL is valued a bit more expensive than 66.67% of the companies in the same industry.
- DOL is valuated rather expensively when we compare the Price/Forward Earnings ratio to 25.96, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.82 | ||
| Fwd PE | 35.02 |
4.2 Price Multiples
- 66.67% of the companies in the same industry are cheaper than DOL, based on the Enterprise Value to EBITDA ratio.
- 66.67% of the companies in the same industry are cheaper than DOL, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.59 | ||
| EV/EBITDA | 26.37 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DOL does not grow enough to justify the current Price/Earnings ratio.
- 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
PEG (5Y)2.11
EPS Next 2Y12.96%
EPS Next 3Y12.92%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.22%, DOL is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 2.81, 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
- The dividend of DOL is nicely growing with an annual growth rate of 15.08%!
- 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 39.82 and the Price/Book (PB) ratio is 39.31.
Can you provide the financial health for DOL stock?
The financial health rating of DOLLARAMA INC (DOL.CA) is 6 / 10.