August 1, 2024
Top 10 Stock DSM Strong 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: DSM – Top 10 Stock in AEX Index
DSM is listed as a top 10 stock on August 01, 2024 in the market index AEX because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 95 (top 95% performer), Obermatt assesses an overall strong buy recommendation for DSM on August 01, 2024.
Snapshot: Obermatt Ranks
| Country | Netherlands |
| Industry | Specialty Chemicals |
| Index | AEX, Employee Focus EU, Energy Efficient, Diversity Europe, SDG 12, SDG 13, SDG 2, SDG 3, SDG 7 |
| Size class | X-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 DSM Strong Buy
| 360 METRICS | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 71 |
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| GROWTH | ||||||||
| GROWTH | 27 |
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| SAFETY | ||||||||
| SAFETY | 78 |
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| SENTIMENT | ||||||||
| SENTIMENT | 63 |
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| 360° VIEW | ||||||||
| 360° VIEW | 95 |
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ANALYSIS: With an Obermatt 360° View of 95 (better than 95% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock DSM are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for DSM. The consolidated Value Rank has an attractive rank of 71, which means that the share price of DSM is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 71% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 78. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 63. But the consolidated Growth Rank has a low rank of 27, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 73 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 95, DSM is better positioned than 95% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 71), secure financing practices (Safety Rank of 78), and positive market sentiment in the professional investor community (Sentiment Rank of 63). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 27), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of DSM is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for DSM positive
ANALYSIS: With an Obermatt Sentiment Rank of 63 (better than 63% compared with alternatives), overall professional sentiment and engagement for the stock DSM is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for DSM. Analyst Opinions are at a rank of 67 (better than 67% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 72, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 72% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 39, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in DSM. There are also only so many institutional investors holding company stock with a Professional Investors rank of 39, which means that, currently, professional investors hold less stock in this company than in 61% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 63 (more positive than 63% compared with investment alternatives), DSM has a reputation among professional investors that is above-average compared with that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: DSM Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 71 (better than 71% compared with alternatives), DSM shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for DSM. Price-to-Sales (P/S) is 97, which means that the stock price compared with what market professionals expect for future sales is lower than for 97% of comparable companies, indicating a good value regarding DSM's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 63% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 84. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than DSM (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 71, is a buy recommendation based on DSM's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: DSM Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), DSM 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 DSM. Sales Growth has a rank of 53 which means that currently professionals expect the company to grow more than 53% of its competitors. Stock Returns are also above average with a rank of 55. But Capital Growth has only a rank of 34, which means that currently professionals expect the company to grow its invested capital less than 66% of its competitors. Profit Growth is also low, with a rank of only 14, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 27, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 55% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: DSM Debt Financing Safety very solid
| SAFETY METRICS | August 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 74 |
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| REFINANCING | ||||||||
| REFINANCING | 100 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 19 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 78 |
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ANALYSIS: With an Obermatt Safety Rank of 78 (better than 78% compared with alternatives) for 2024, the company DSM has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of DSM 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 where two out of three are above average for DSM.Leverage is at 74, meaning the company has a below-average debt-to-equity ratio. It has less debt than 74% of its competitors.Refinancing is at a rank of 100, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 100% of its competitors. Liquidity is at 19, meaning that the company generates less profit to service its debt than 81% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 78 (better than 78% compared with alternatives), DSM has a financing structure that is significantly safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: DSM Top Financial Performance
| COMBINED PERFORMANCE | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 71 |
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| GROWTH | ||||||||
| GROWTH | 27 |
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| SAFETY | ||||||||
| SAFETY | 19 |
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| COMBINED | ||||||||
| COMBINED | 76 |
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ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), DSM (Specialty Chemicals, Netherlands) shares have much better financial characteristics than comparable stocks. Shares of DSM are a good value (attractively priced) with a consolidated Value Rank of 71 (better than 71% of alternatives), are safely financed (Safety Rank of 78, which means low debt burdens), but show below-average growth (Growth Rank of 27). ...read more
RECOMMENDATION: A Combined Rank of 76, is a strong buy recommendation based on DSM's financial characteristics. As the company DSM's key financial metrics exhibit good value (Obermatt Value Rank of 71) but low growth (Obermatt Growth Rank of 27) while being safely financed (Obermatt Safety Rank of 78), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 71% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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