ADF GROUP INC (DRX.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:DRX - CA00089N1033 - Common Stock
8.24 CAD
-0.09 (-1.08%)
DRX gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 820 industry peers in the Metals & Mining industry. DRX scores excellent points on both the profitability and health parts. This is a solid base for a good stock. DRX is cheap, but on the other hand it scores bad on growth. This makes DRX very considerable for value investing!
1. Profitability
1.1 Basic Checks
- DRX had positive earnings in the past year.
- In the past year DRX had a positive cash flow from operations.
- DRX had positive earnings in each of the past 5 years.
- DRX had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
- DRX has a better Return On Assets (9.14%) than 91.95% of its industry peers.
- Looking at the Return On Equity, with a value of 16.03%, DRX belongs to the top of the industry, outperforming 94.15% of the companies in the same industry.
- DRX has a Return On Invested Capital of 14.59%. This is amongst the best in the industry. DRX outperforms 96.46% of its industry peers.
- DRX had an Average Return On Invested Capital over the past 3 years of 18.23%. This is significantly above the industry average of 12.04%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.14% | ||
| ROE | 16.03% | ||
| ROIC | 14.59% |
ROA(3y)11.8%
ROA(5y)8.76%
ROE(3y)22.9%
ROE(5y)16.89%
ROIC(3y)18.23%
ROIC(5y)13.62%
1.3 Margins
- With an excellent Profit Margin value of 11.29%, DRX belongs to the best of the industry, outperforming 92.32% of the companies in the same industry.
- DRX's Profit Margin has improved in the last couple of years.
- DRX's Operating Margin of 17.56% is amongst the best of the industry. DRX outperforms 91.59% of its industry peers.
- In the last couple of years the Operating Margin of DRX has grown nicely.
- The Gross Margin of DRX (25.97%) is better than 90.12% of its industry peers.
- In the last couple of years the Gross Margin of DRX has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.56% | ||
| PM (TTM) | 11.29% | ||
| GM | 25.97% |
OM growth 3Y76.93%
OM growth 5Y146%
PM growth 3Y69.95%
PM growth 5YN/A
GM growth 3Y53.12%
GM growth 5Y28.02%
2. Health
2.1 Basic Checks
- DRX has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- DRX has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, DRX has less shares outstanding
- The debt/assets ratio for DRX has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 2.70 indicates that DRX is not a great score, but indicates only limited risk for bankruptcy at the moment.
- DRX's Altman-Z score of 2.70 is in line compared to the rest of the industry. DRX outperforms 46.46% of its industry peers.
- DRX has a debt to FCF ratio of 8.57. This is a slightly negative value and a sign of low solvency as DRX would need 8.57 years to pay back of all of its debts.
- DRX has a better Debt to FCF ratio (8.57) than 90.12% of its industry peers.
- A Debt/Equity ratio of 0.21 indicates that DRX is not too dependend on debt financing.
- DRX has a Debt to Equity ratio of 0.21. This is in the lower half of the industry: DRX underperforms 66.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 8.57 | ||
| Altman-Z | 2.7 |
ROIC/WACC1.51
WACC9.68%
2.3 Liquidity
- A Current Ratio of 2.27 indicates that DRX has no problem at all paying its short term obligations.
- Looking at the Current ratio, with a value of 2.27, DRX is in line with its industry, outperforming 54.63% of the companies in the same industry.
- A Quick Ratio of 2.03 indicates that DRX has no problem at all paying its short term obligations.
- DRX's Quick ratio of 2.03 is in line compared to the rest of the industry. DRX outperforms 54.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.27 | ||
| Quick Ratio | 2.03 |
3. Growth
3.1 Past
- The earnings per share for DRX have decreased strongly by -45.92% in the last year.
- The Earnings Per Share has been growing by 84.52% on average over the past years. This is a very strong growth
- The Revenue for DRX has decreased by -26.61% in the past year. This is quite bad
- Measured over the past years, DRX shows a quite strong growth in Revenue. The Revenue has been growing by 13.58% on average per year.
EPS 1Y (TTM)-45.92%
EPS 3Y84.52%
EPS 5YN/A
EPS Q2Q%-34.55%
Revenue 1Y (TTM)-26.61%
Revenue growth 3Y6.55%
Revenue growth 5Y13.58%
Sales Q2Q%-10.68%
3.2 Future
- The Earnings Per Share is expected to decrease by -4.83% on average over the next years.
- Based on estimates for the next years, DRX will show a small growth in Revenue. The Revenue will grow by 4.74% on average per year.
EPS Next Y-40.72%
EPS Next 2Y-4.83%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-24.78%
Revenue Next 2Y4.74%
Revenue Next 3YN/A
Revenue Next 5YN/A
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 decreasing.
- 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
- The Price/Earnings ratio is 4.48, which indicates a rather cheap valuation of DRX.
- Compared to the rest of the industry, the Price/Earnings ratio of DRX indicates a rather cheap valuation: DRX is cheaper than 97.93% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.25, DRX is valued rather cheaply.
- The Price/Forward Earnings ratio is 4.94, which indicates a rather cheap valuation of DRX.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of DRX indicates a rather cheap valuation: DRX is cheaper than 97.68% of the companies listed in the same industry.
- DRX is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.48 | ||
| Fwd PE | 4.94 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DRX indicates a rather cheap valuation: DRX is cheaper than 99.27% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, DRX is valued cheaper than 95.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.22 | ||
| EV/EBITDA | 2.82 |
4.3 Compensation for Growth
- DRX has an outstanding profitability rating, which may justify a higher PE ratio.
- A cheap valuation may be justified as DRX's earnings are expected to decrease with -4.83% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-4.83%
EPS Next 3YN/A
5. Dividend
5.1 Amount
- With a yearly dividend of 0.48%, DRX is not a good candidate for dividend investing.
- DRX's Dividend Yield is rather good when compared to the industry average which is at 0.56. DRX pays more dividend than 95.85% of the companies in the same industry.
- With a Dividend Yield of 0.48, DRX pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.48% |
5.2 History
- On average, the dividend of DRX grows each year by 8.48%, which is quite nice.
- DRX has paid a dividend for at least 10 years, which is a reliable track record.
- DRX has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.48%
Div Incr Years1
Div Non Decr Years13
5.3 Sustainability
- 3.95% of the earnings are spent on dividend by DRX. This is a low number and sustainable payout ratio.
DP3.95%
EPS Next 2Y-4.83%
EPS Next 3YN/A
ADF GROUP INC / DRX.CA FAQ
What is the fundamental rating for DRX stock?
ChartMill assigns a fundamental rating of 7 / 10 to DRX.CA.
What is the valuation status of ADF GROUP INC (DRX.CA) stock?
ChartMill assigns a valuation rating of 8 / 10 to ADF GROUP INC (DRX.CA). This can be considered as Undervalued.
What is the profitability of DRX stock?
ADF GROUP INC (DRX.CA) has a profitability rating of 9 / 10.
What is the valuation of ADF GROUP INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ADF GROUP INC (DRX.CA) is 4.48 and the Price/Book (PB) ratio is 0.75.
What is the earnings growth outlook for ADF GROUP INC?
The Earnings per Share (EPS) of ADF GROUP INC (DRX.CA) is expected to decline by -40.72% in the next year.