Brought in today interesting company and one with a progressive divy for my income holding |
Another excellent set of results,revenue up 44% ,adjusted profit up 13% and interim dividend up 7.5%.Three of the four divisions continue to power ahead,despite all the headwinds.Healthcare showing a modest decline,due to stellar previous year comparison and covid related delays in healthsystem ( fewer elective procedures)but set for full year profit growth.The resilience of DCC model is clear. |
Hard to see any upside in the near term - profitable company but 70% of the business is still oil/gas related which is problematic for investors no matter how it's spun.
In the long run this should become a well diversified company (hopefully not in the Maynard Keynes long run timeframe) |
chart still looks dreadful and turned down after the mini rally recently. But a lot of stocks have sad looking charts in this bearish market |
Nice little bolt-on in the clean energy sector with the purchase of PVO,all about synergies. |
 dcme,you make some interesting and valid points.Obviously,when a company's share price does not keep up with the business for a period of time,a little like a football team underperforming,the simplistic approach is to call for a break-up and 'sack the manager'respectively.
I say simplistic because the capital of the company is not being eroded,it's been invested into bolt-on acquisitions which cumulatively increase growth rates.Yes,they do (in one division) distribute fuel but much if it is LNG,one of the 'cleaner'fuels.This business isn't going anywhere soon.(I also own tobacco companies,I'm afraid).Health and Beauty continues to outperform,and they continue to build out in distribution.The 'fossil fuel' business is not about 'greenwashing'.They are making the real economy greener and the links they have,through the distribution business,enables this.As a long term investor,I have often seen periods of underperformance.Often,I make the really serious gains in year seven,for some strange reason. |
awful looking chart tells the story recently with more downside yet sadly |
From the mid 2010s onwards this stock has de-rated (30% since 2016). This coincides with the mainstreaming of climate change awareness and fossil fuel demonization. While DCC has diversified significantly over the past decade, the bottom line is that the perception of the company is that of an oil and gas distributer. Greenwashing the energy side is not enough - they should really split the businesses and float the non fuel related operations as independent entities. Touting the dividend increments means nothing if invested capital is continually getting eroded. It's also hard to believe there have been no significant share buybacks (given the great value proposition here?) |
Allianz Global selling some of their shares,silly billies. |
The DCC Healthcare purchase of Medi-Globe for €245 million is a further expansion in one of the higher growth segments of the company.Should add synergies to the division. |
Well,prokartace,I feel my honour and reputation have been impugned and I demand satisfaction.May I suggest a duel at dawn?My weapon of choice will be a handbag. |
Now, now boys take it easy. As with every share of this nature there is always an argument for whe way that current and historic figures are interpreted but, while I understand you both have differing opinions, Alfred I don't understand what your interest is in having this discussion. You clearly don't, or shouldn't, have a holding so what is your game? |
DJ Derry, I think your record in commenting on this company speaks for itself. You just don't get it. |
Alfred,if I were you,I wouldn't invest here.I would find a company that I was comfortable with,do substantial due diligence and then invest an amount that would be meaningful in a portfolio context.
I would also beware of selective use of two data points in coming to any set conclusion.I would broaden my examination to include,for example,adjusted operating profit,up 11.2%,revenue up 32%,EPS growth up 11.1%,adjusted earnings per share up 13.8%.I could go on.
However,at the risk of repeating myself,a one year,or for that matter a five year period is quite arbitrary.
How has the company performed over its lifetime? Well,a 14% per annum profit and an ROCE of 19% over 28 years is,I suggest, evidence of the calibre of DCC.
The reference to 'empire building'is ,I would suggest,rather tenuous.Growth through acquisition ( having bought hundreds of companies) is one of DCC's key competencies.Acquisition growth this year alone amounted to 9%).If an acquired company does not meet growth targets,( very rare occasion),they are divested.
Where the reference to 'empire building' is,perhaps,accurate, is in a way the poster failed to comprehend.The company does,indeed,seek to become one of the market leaders,or top two/three companies in the areas in which they specialise.This aim,and the 28 year history of achieving their targets,have profound implications.DCC in 2030 will be a far greater company by revenue and profits.
As an investor,this is what I am seeking.
I'm also willing to wager that the share price will have greatly increased. |
Well, it's easy to show an increase in profits if you keep blowing resources on acquisitions but adjusted earnings per share have only increased by 35% in five years, not exactly a growth stock is it? The dividend yield is only whisker over 3%, not exactly an income stock either. This is why the stock seems (to some) to have an unduly modest rating. The management needs to give more attention to shareholder value and less on empire building' |
I own plenty of companies that the market is pricing insanely low ( Burford Capital is the best example) but this is starting to compete.Stellar results and down goes the share price One of the key ingredients for success in investment is,when you have done the due diligence,infinite patience.Over a five year period,the share price is down 20%,while every year the co. grows profits by circa 10 to 15%.Later,rather than sooner,it's got to double in price.After all this time,I'm still a buyer.(Ps,the 20% decline does not include dividends). |
DCC Plc today announced that it would purchase U.S. sales and distribution business Almo Corporation for $610 million on a cash-free, debt-free basis. The deal counts as the company’s largest acquisition to date as it looks to expand its technology unit in North America. The company also committed a further £550m to acquisitions in FY22. So more acquisitive growth is likely in coming years. The business was growing steadily ahead of COVID and should post a new record topline in FY22. The same applies to net profit and EPS. Valuation is quite attractive with forward PE ratio of 12.8 ranked 2nd out of 11 in the Personal & Household Products & Services market. PS ratio at 0.36 is also ranked 2nd for the sector. Balance sheet is decent quality, £1.8b cash, net debt just £0.6b. But share price lacks momentum and has been trading sideways for 5 years now. No particular rush to buy here, but certainly a solid mid-cap to monitor for now...from WealthOracleAM |
While today's acquisition of Almo Corporation for over $600 million may seem pricey,it does seem to tick all the boxes: revenue of $1.3 billion,EBITA of $75 million,gross assets of $409 million and,perhaps most impressive,operating margin of 5.7% which,even for a specialist distributor,is pretty impressive.Management at the family-owned company are staying in place,which I like to see.There should be synergies with the North American/Canadian arm of DCC Tech and will contribute 10% to EPS and achieve 15%ROIC within three years,a key metric.What's not to like? |
Compound annual growth rate is over 14%.And that is over 27 years.
Free cash flow is 104%.
Dividend growth is 13.9%.
And,by the way,total shareholder returns is 6640% over the 27 years.
My point is that however detached a company becomes from the share price,over time patient investors will be rewarded. |
DJ Derry, I refer you to my post no 161 and your sneering replies 163 and 164. Care to apologise? |
Quite amusing,really strong interims,yet the share price is down almost 5 per cent. |
Stellar interim results.I wonder will anyone ask about the weather? It's been pretty mild so far,will we get a subtle profit's warning? |
Interesting investor presentation in the form of a soft interview, analysts' questions a little more revealing.Good traction/growth in the business.No one asked the glaring question,would DCC Healthcare be worth a lot more on a stand-alone basis.But it wasn't that kind of interview. |
Very positive IMS for the seasonally quieter first half.It bodes well for the FY outcome |
This morning's announcement is both shocking and sad.Condolences to Mr.McCarthy's family. |
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