February 1, 2024
Top 10 Stock DCC 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: DCC – Top 10 Stock in FTSE 100 Index
DCC is listed as a top 10 stock on February 01, 2024 in the market index FTSE 100 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. Based on the Obermatt 360° View of 97 (top 97% performer), Obermatt assesses an overall strong buy recommendation for DCC on February 01, 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 Strong Buy
| 360 METRICS | February 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 89 |
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| SAFETY | ||||||||
| SAFETY | 33 |
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| SENTIMENT | ||||||||
| SENTIMENT | 85 |
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| 360° VIEW | ||||||||
| 360° VIEW | 97 |
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ANALYSIS: With an Obermatt 360° View of 97 (better than 97% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock DCC are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for DCC. The consolidated Value Rank has an attractive rank of 63, 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 the stock price is lower than for 63% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 89, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 85. But the company’s financing is risky with a Safety rank of 33. This means 67% of comparable companies have a safer financing structure than DCC. ...read more
RECOMMENDATION: With a consolidated 360° View of 97, DCC is better positioned than 97% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 63), above-average growth (Growth Rank of 89), and positive market sentiment in the professional investor community (Sentiment Rank of 85), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 33), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of DCC is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for DCC very positive
ANALYSIS: With an Obermatt Sentiment Rank of 85 (better than 85% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock DCC is very positive.
RECOMMENDATION: With a consolidated Sentiment Rank of 85 (more positive than 85% compared with investment alternatives), DCC has a reputation among professional investors that is significantly higher than that of its competitors.
Value Strategy: DCC Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 63 (better than 63% compared with alternatives), DCC shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for DCC. Price-to-Sales (P/S) is 90, which means that the stock price compared with what market professionals expect for future sales is lower than for 90% of comparable companies, indicating a good value concerning DCC's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 65, which means that dividends are expected to be higher than for 65% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 67% of alternatives (only 33% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 60% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 63, is a buy recommendation based on DCC's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: DCC Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 89 (better than 89% compared with alternatives) for 2024, DCC 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 four indicators above average for DCC. Sales Growth has a value of 59, which means that, currently, professionals expect the company to grow more than 59% of its competitors. The same is valid for Profit Growth with a value of 52 and for Capital Growth with 66. In addition, Stock Returns had an above-average rank value of 91, which means they have been higher than 91% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 89, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, DCC exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: DCC Debt Financing Safety below-average
| SAFETY METRICS | February 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 30 |
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| REFINANCING | ||||||||
| REFINANCING | 59 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 22 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 33 |
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ANALYSIS: With an Obermatt Safety Rank of 33 (better than 33% 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 59, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 59% of its competitors. But Leverage is high with a rank of 30, meaning the company has an above-average debt-to-equity ratio. It has more debt than 70% of its competitors. Liquidity is also on the riskier side with a rank of 22, meaning the company generates less profit to service its debt than 78% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 33 (worse than 67% 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 Top Financial Performance
| COMBINED PERFORMANCE | February 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 89 |
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| SAFETY | ||||||||
| SAFETY | 22 |
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| COMBINED | ||||||||
| COMBINED | 89 |
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ANALYSIS: With an Obermatt Combined Rank of 89 (better than 89% compared with investment alternatives), DCC (Industrial Conglomerates, Ireland) shares have much better financial characteristics than comparable stocks. Shares of DCC are a good value (attractively priced) with a consolidated Value Rank of 63 (better than 63% of alternatives), show above-average growth (Growth Rank of 89) but are riskily financed (Safety Rank of 33), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 89, is a strong buy recommendation based on DCC's financial characteristics. As the company DCC's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 63) and above-average growth (Obermatt Growth Rank of 89), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 33) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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