September 12, 2024
Top 10 Stock DCC Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: DCC – Top 10 Stock in FTSE 100 Index
DCC is listed as a top 10 stock on September 12, 2024 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 50 (high 50% performer), Obermatt assesses an overall buy recommendation for DCC on September 12, 2024.
Snapshot: Obermatt Ranks
| Country | Ireland |
| Industry | Industrial Conglomerates |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Sound Pay Europe |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View DCC Buy
| 360 METRICS | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 77 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 49 |
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| SENTIMENT | ||||||||
| SENTIMENT | 44 |
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| 360° VIEW | ||||||||
| 360° VIEW | 50 |
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ANALYSIS: With an Obermatt 360° View of 50 (better than 50% compared with alternatives), overall professional sentiment and financial characteristics for the stock DCC are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for DCC. Only the consolidated Value Rank has an attractive rank of 77, which means that the share price of DCC is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 77% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 29, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 49, meaning the company has a riskier financing structure than 51% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 56% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 44. ...read more
RECOMMENDATION: With a consolidated 360° View of 50, DCC is better positioned than 50% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 77. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 29), a riskier financing structure than the competition (Safety Rank of 49), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 44) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of DCC is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of DCC. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for DCC only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 44 (better than 44% compared with alternatives), overall professional sentiment and engagement for the stock DCC is below industry average.
RECOMMENDATION: With a consolidated Sentiment Rank of 44 (less encouraging than 56% compared with investment alternatives), DCC has a reputation among professional investors that is below that of its competitors.
Value Strategy: DCC Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 77 (better than 77% compared with alternatives) for 2024, DCC shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for DCC. Price-to-Sales is 93 which means that the stock price compared with what market professionals expect for future sales is lower than for 93% of comparable companies, indicating a good value for DCC's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 62% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 52. Compared with other companies in the same industry, dividend yields of DCC are expected to be higher than for 73% of all competitors (a Dividend Yield rank of 73). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 77, is a buy recommendation based on DCC's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in DCC based on its detailed value metrics.
Growth Strategy: DCC Growth Momentum low
| GROWTH METRICS | September 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 12 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 65 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 37 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 55 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 29 |
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ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), DCC shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for DCC. Profit Growth has a rank of 65, which means that currently professionals expect the company to grow its profits more than 65% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 55 (above 55% of alternative investments). But Sales Growth has a below the median rank of 12, which means that, currently, professionals expect the company to grow less than 88% of its competitors, and Capital Growth also has a lower rank of 37. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for DCC. ...read more
Safety Strategy: DCC Debt Financing Safety below-average
| SAFETY METRICS | September 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 63 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 30 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 49 |
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ANALYSIS: With an Obermatt Safety Rank of 49 (better than 49% compared with alternatives), the company DCC has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of DCC is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for DCC and the other two below average. Refinancing is at 63, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. But Leverage is high with a rank of 36, meaning the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. Liquidity is also on the riskier side with a rank of 30, meaning the company generates less profit to service its debt than 70% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 49 (worse than 51% compared with alternatives), DCC has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for DCC are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: DCC Above-Average Financial Performance
| COMBINED PERFORMANCE | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 77 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 30 |
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| COMBINED | ||||||||
| COMBINED | 57 |
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ANALYSIS: With an Obermatt Combined Rank of 57 (better than 57% compared with investment alternatives), DCC (Industrial Conglomerates, Ireland) shares have above-average financial characteristics compared with similar stocks. Shares of DCC are a good value (attractively priced) with a consolidated Value Rank of 77 (better than 77% of alternatives) but show below-average growth (Growth Rank of 29), and are riskily financed (Safety Rank of 49), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 57, is a buy recommendation based on DCC's financial characteristics. As the company DCC's key financial metrics exhibit good value (Obermatt Value Rank of 77) but low growth (Obermatt Growth Rank of 29) and risky financing practices (Obermatt Safety Rank of 49), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 77% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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