Fact based stock research
Dis-Chem Pharmacies (JSE:DCP)

ZAE000227831

How to read the free 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.

Dis-Chem Pharmacies stock research in summary

dischemgroup.com

ANALYSIS: With an Obermatt Combined Rank of 55 (better than 55% compared with investment alternatives), Dis-Chem Pharmacies (Drug Retail, South Africa) shares have above-average financial characteristics compared with similar stocks. Shares of Dis-Chem Pharmacies are low in value (priced high) with a consolidated Value Rank of 17 (worse than 83% of alternatives). But they show above-average growth (Growth Rank of 87) and are safely financed (Safety Rank of 53, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 55, is a buy recommendation based on Dis-Chem Pharmacies's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Dis-Chem Pharmacies exhibits low value (Obermatt Value Rank of 17), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 87). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 53) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	17
Growth Rank	87
Safety Rank	53
Combined Rank	55

Country	South Africa
Industry	Drug Retail
Index	JSE All Shares
Size class	Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Dis-Chem Pharmacies

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	26	23	23	17
GROWTH
GROWTH	78	53	57	87
SAFETY
SAFETY	50	38	56	53
SENTIMENT
SENTIMENT	n/a	43	27	^new
360° VIEW
360° VIEW	n/a	29	28	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 29-Feb-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Dis-Chem Pharmacies is in the corresponding investment strategy.
Upgrade to a Premium Account to access the latest ranks.

Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	26	23	23	17
GROWTH
GROWTH	78	53	57	87
SAFETY
SAFETY	50	38	56	53
COMBINED
COMBINED	45	21	36	55

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Dis-Chem Pharmacies the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 17 (worse than 83% compared with alternatives), Dis-Chem Pharmacies shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Dis-Chem Pharmacies. Price-to-Sales is 49 which means that the stock price compared with what market professionals expect for future profits is higher than 51% of comparable companies, indicating a low value concerning Dis-Chem Pharmacies's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 13, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Dis-Chem Pharmacies. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 22 and Dividend Yield, which is lower than 69% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 17, is a sell recommendation based on Dis-Chem Pharmacies's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Dis-Chem Pharmacies? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Dis-Chem Pharmacies? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Dis-Chem Pharmacies may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	61	43	50	49
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	19	33	31	22
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	10	13	18	13
DIVIDEND YIELD
DIVIDEND YIELD	62	33	39	31
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	26	23	23	17

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Dis-Chem Pharmacies; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 87 (better than 87% compared with alternatives) for 2024, Dis-Chem Pharmacies shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Dis-Chem Pharmacies. Sales Growth has a rank of 90 which means that currently, professionals expect the company to grow more than 90% of its competitors. Both Profit Growth, with a rank of 65, and Stock Returns, with a rank of 83, are also above average. But Capital Growth only has a rank of 34, which means that, currently, professionals expect the company to grow its invested capital less than 66% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 87, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	50	56	70	90
PROFIT GROWTH
PROFIT GROWTH	n/a	50	44	65
CAPITAL GROWTH
CAPITAL GROWTH	n/a	17	41	34
STOCK RETURNS
STOCK RETURNS	92	85	55	83
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	78	53	57	87

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Dis-Chem Pharmacies.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 53 (better than 53% compared with alternatives), the company Dis-Chem Pharmacies has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Dis-Chem Pharmacies is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Dis-Chem Pharmacies. Refinancing is at 52, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 52% of its competitors. Liquidity is also good at 58, meaning the company generates more profit to service its debt than 58% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 34, which means the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 53 (better than 53% compared with alternatives), Dis-Chem Pharmacies has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Dis-Chem Pharmacies could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Dis-Chem Pharmacies and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	36	28	36	34
REFINANCING
REFINANCING	64	51	53	52
LIQUIDITY
LIQUIDITY	47	47	60	58
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	50	38	56	53

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Dis-Chem Pharmacies and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	17	54	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	29	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	65	31	^new
MARKET PULSE
MARKET PULSE	n/a	52	40	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	43	27	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Dis-Chem Pharmacies.
Upgrade to a Premium Account to access the latest ranks.