January 11, 2024
Top 10 Stock Dick's 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: Dick's – Top 10 Stock in SDG 15: Life on Land
Dick's is listed as a top 10 stock on January 11, 2024 in the market index SDG 15 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 62 (high 62% performer), Obermatt assesses an overall buy recommendation for Dick's on January 11, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Specialty Stores |
| Index | Employee Focus US, Human Rights, SDG 13, SDG 15, SDG 5, S&P MIDCAP |
| 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 Dick's Buy
| 360 METRICS | January 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 63 |
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| SAFETY | ||||||||
| SAFETY | 45 |
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| SENTIMENT | ||||||||
| SENTIMENT | 64 |
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| 360° VIEW | ||||||||
| 360° VIEW | 62 |
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ANALYSIS: With an Obermatt 360° View of 62 (better than 62% compared with alternatives), overall professional sentiment and financial characteristics for the stock Dick's are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Dick's. The consolidated Value Rank has an attractive rank of 53, which means that the share price of Dick's 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 53% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 63, 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 64. But the company’s financing is risky with a Safety rank of 45. This means 55% of comparable companies have a safer financing structure than Dick's. ...read more
RECOMMENDATION: With a consolidated 360° View of 62, Dick's is better positioned than 62% 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 53), above-average growth (Growth Rank of 63), and positive market sentiment in the professional investor community (Sentiment Rank of 64), 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 45), 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 Dick's 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 Dick's positive
ANALYSIS: With an Obermatt Sentiment Rank of 64 (better than 64% compared with alternatives), overall professional sentiment and engagement for the stock Dick's is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for Dick's. Analyst Opinions are at a rank of 52 (better than 52% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 90 which means that currently, professional investors hold more stock in this company than in 90% of alternative investment opportunities. But Analyst Opinions Change has a rank of 49, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in Dick's. Furthermore, Market Pulse has a rank of 43, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 57% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 64 (more positive than 64% compared with investment alternatives), Dick's has a reputation among professional investors that is above-average compared with that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: Dick's Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 53 (better than 53% compared with alternatives), Dick's shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Dick's. Price-to-Profit (also referred to as price-earnings, P/E) is 63 which means that the stock price compared with what market professionals expect for future profits is lower than for 63% of comparable companies, indicating a good value concerning Dick's's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 32, which means that the stock price is lower as regards to invested capital than for 32% of comparable investments. On the other hand, Price-to-Sales is less favorable than 72% of alternatives (only 28% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 10% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 53, is a buy recommendation based on Dick's's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Dick's Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 63 (better than 63% compared with alternatives), Dick's shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Dick's. Profit Growth has a rank of 64 which means that currently professionals expect the company to grow its profits more than 64% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 64, and Stock Returns has a rank of 73 which means that the stock returns have recently been above 73% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 38 (62% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 63, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Dick's Debt Financing Safety below-average
| SAFETY METRICS | January 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 42 |
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| REFINANCING | ||||||||
| REFINANCING | 50 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 62 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 45 |
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ANALYSIS: With an Obermatt Safety Rank of 45 (better than 45% compared with alternatives), the company Dick's 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 Dick's 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 two out of three indicators above-average for Dick's. Refinancing is at 50, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 50% of its competitors. Liquidity is also good at 62, meaning the company generates more profit to service its debt than 62% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 42, which means the company has an above-average debt-to-equity ratio. It has more debt than 58% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 45 (worse than 55% compared with alternatives), Dick's has a financing structure that is riskier 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 Dick's 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. ...read more
Combined financial peformance: Dick's Above-Average Financial Performance
| COMBINED PERFORMANCE | January 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 63 |
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| SAFETY | ||||||||
| SAFETY | 62 |
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| COMBINED | ||||||||
| COMBINED | 55 |
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ANALYSIS: With an Obermatt Combined Rank of 55 (better than 55% compared with investment alternatives), Dick's (Specialty Stores, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Dick's are a good value (attractively priced) with a consolidated Value Rank of 53 (better than 53% of alternatives), show above-average growth (Growth Rank of 63) but are riskily financed (Safety Rank of 45), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 55, is a buy recommendation based on Dick's's financial characteristics. As the company Dick's's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 53) and above-average growth (Obermatt Growth Rank of 63), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 45) 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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