Downer EDI

ASX:DOW

Snowflake Description

Adequate balance sheet second-rate dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.

DOW

ASX

A$5B

Market Cap

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Last updated 2019/05/22 10:31

Company description

Downer EDI Limited operates as a services provider in Australia, New Zealand, the Asia-Pacific, South America, and Southern Africa. The last earnings update was 104 days ago. More info.

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DOW Share Price and Events

7 Day Returns

1.1%

ASX:DOW

1.4%

AU Commercial Services

AU Market

1 Year Returns

11%

ASX:DOW

17.8%

AU Commercial Services

5.2%

AU Market

DOW Shareholder Return

	7 Day	30 Day	90 Day	1 Year	3 Year	5 Year
Downer EDI (DOW)	1.1%	1.5%	10%	11%	106.2%	47.3%
AU Commercial Services	1.4%	3.5%	9%	17.8%	19.7%	39%
AU Market	4%	3.5%	5.9%	5.2%	21.7%	9.6%

1 Year Return vs Industry and Market

DOW underperformed the Commercial Services industry which returned 17.8% over the past year.
DOW outperformed the Market in Australia which returned 5.2% over the past year.

Price Volatility

DOW

Industry

5yr Volatility vs Market

Related Companies

Value

Is Downer EDI undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.

INTRINSIC VALUE BASED ON FUTURE CASH FLOWS

Here we compare the current share price of Downer EDI to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Downer EDI.

ASX:DOW Discounted Cash Flow Data Sources
Data Point	Source	Value
Valuation Model		2 Stage Free Cash Flow to Equity
Levered Free Cash Flow	Average of 8 Analyst Estimates (S&P Global)	See below
Discount Rate (Cost of Equity)	See below	7.8%
Perpetual Growth Rate	10-Year AU Government Bond Rate	2.3%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for ASX:DOW
Data Point	Calculation/ Source	Result
Risk-Free Rate	10-Year AU Govt Bond Rate	2.3%
Equity Risk Premium	S&P Global	6%
Commercial Services Unlevered Beta	Simply Wall St/ S&P Global	0.72
Re-levered Beta	= Unlevered beta (1 + (1- tax rate) (Debt/Equity)) = 0.718 (1 + (1- 30%) (30.7%))	0.914
Levered Beta	Levered Beta limited to 0.8 to 2.0 (practical range for a stable firm)	0.91
Discount Rate/ Cost of Equity	= Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium) = 2.31% + (0.914 * 5.96%)	7.76%

Discounted Cash Flow Calculation for ASX:DOW using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Downer EDI is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

ASX:DOW DCF 1st Stage: Next 10 year cash flow forecast
	Levered FCF (AUD, Millions)	Source	Present Value Discounted (@ 7.76%)
2019	346.50	Analyst x2	321.55
2020	422.00	Analyst x1	363.41
2021	290.00	Analyst x1	231.75
2022	216.69	Est @ -25.28%	160.70
2023	179.85	Est @ -17%	123.77
2024	159.69	Est @ -11.21%	101.98
2025	148.27	Est @ -7.15%	87.87
2026	141.88	Est @ -4.31%	78.03
2027	138.58	Est @ -2.33%	70.72
2028	137.29	Est @ -0.93%	65.02
Present value of next 10 years cash flows			A$1,604.79

ASX:DOW DCF 2nd Stage: Terminal Value
	Calculation	Result
Terminal Value	= FCF₂₀₂₈ × (1 + g) ÷ (Discount Rate – g) = A$137.29 × (1 + 2.31%) ÷ (7.76% – 2.31%)	A$2,577.96
Present Value of Terminal Value	= Terminal Value ÷ (1 + r)¹⁰ = A$2,577.96 ÷ (1 + 7.76%)¹⁰	A$1,220.90

ASX:DOW Total Equity Value
	Calculation	Result
Total Equity Value	= Present value of next 10 years cash flows + Terminal Value = A$1,604.79 + A$1,220.90	A$2,825.70
Equity Value per Share (AUD)	= Total value / Shares Outstanding = A$2,825.70 / 591.32	A$4.78

ASX:DOW Discount to Share Price
	Calculation	Result
Value per share (AUD)	From above.	A$4.78
Current discount	Discount to share price of A$7.94 = -1 x (A$7.94 - A$4.78) / A$4.78	-66.2%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

The current share price of Downer EDI is above its future cash flow value.

Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.

PRICE RELATIVE TO MARKET

We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Downer EDI's earnings, growth and assets is considered below, and whether this is a fair price.

Price based on past earnings

Are Downer EDI's earnings available for a low price, and how does this compare to other companies in the same industry?

Raw Data

ASX:DOW PE (Price to Earnings) Ratio Data Sources
Data Point	Source	Value
Earnings Per Share *	Company Filings (2018-12-31) in AUD	A$0.35
ASX:DOW Share Price **	ASX (2019-05-22) in AUD	A$7.94
Australia Commercial Services Industry PE Ratio	Median Figure of 13 Publicly-Listed Commercial Services Companies	22.4x
Australia Market PE Ratio	Median Figure of 542 Publicly-Listed Companies	15.99x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Downer EDI.

ASX:DOW PE (Price to Earnings) Ratio Calculation
	Calculation	Outcome
PE Ratio	= ASX:DOW Share Price ÷ EPS (both in AUD) = 7.94 ÷ 0.35	22.49x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Downer EDI is overvalued based on earnings compared to the AU Commercial Services industry average.
Downer EDI is overvalued based on earnings compared to the Australia market.

Price based on expected Growth

Does Downer EDI's expected growth come at a high price?

Raw Data

ASX:DOW PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point	Source	Value
PE Ratio	See PE Ratio Section	22.49x
Net Income Annual Growth Rate	See Future Growth Section. Line of Best Fit* through Consensus Estimate Earnings of 8 Analysts	2.2%per year
Australia Commercial Services Industry PEG Ratio	Median Figure of 10 Publicly-Listed Commercial Services Companies	1.82x
Australia Market PEG Ratio	Median Figure of 359 Publicly-Listed Companies	1.4x

*Line of best fit is calculated by linear regression .

ASX:DOW PEG (Price to Earnings to Growth) Ratio Calculation
	Calculation	Outcome
PEG Ratio	= PE Ratio ÷ Net Income Annual Growth Rate = 22.49x ÷ 2.2%	10.02x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Downer EDI is poor value based on expected growth next year.

Price based on value of assets

What value do investors place on Downer EDI's assets?

Raw Data

ASX:DOW PB (Price to Book) Ratio Data Sources
Data Point	Source	Value
Book Value per Share	Company Filings (2018-12-31) in AUD	A$4.55
ASX:DOW Share Price *	ASX (2019-05-22) in AUD	A$7.94
Australia Commercial Services Industry PB Ratio	Median Figure of 26 Publicly-Listed Commercial Services Companies	3.28x
Australia Market PB Ratio	Median Figure of 1,678 Publicly-Listed Companies	1.63x

ASX:DOW PB (Price to Book) Ratio Calculation
	Calculation	Outcome
PB Ratio	= ASX:DOW Share Price ÷ Book Value per Share (both in AUD) = 7.94 ÷ 4.55	1.75x

* Primary Listing of Downer EDI.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Downer EDI is good value based on assets compared to the AU Commercial Services industry average.

Value checks

We assess Downer EDI's value by looking at:

Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
Is the PE ratio less than the market average, and/ or less than the Commercial Services industry average (and greater than 0)? (2 checks)
Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
Is the PB ratio less than the Commercial Services industry average (and greater than 0)? (1 check)

Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

How is Downer EDI expected to perform in the next 1 to 3 years based on estimates from 8 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!

2.2%

Expected annual growth in earnings.

Earnings growth vs Low Risk Savings

Is Downer EDI expected to grow at an attractive rate?

Downer EDI's earnings growth is positive but not above the low risk savings rate of 2.3%.

Growth vs Market Checks

Downer EDI's earnings growth is positive but not above the Australia market average.
Downer EDI's revenue growth is expected to exceed the Australia market average.

Annual Growth Rates Comparison

Raw Data

ASX:DOW Future Growth Rates Data Sources
Data Point	Source	Value (per year)
ASX:DOW Future Earnings Growth Rate	Line of Best Fit* through Consensus Estimate Earnings of 8 Analysts	2.2%
ASX:DOW Future Revenue Growth Rate	Line of Best Fit* through Consensus Estimate Revenue of 8 Analysts	3.6%
Australia Commercial Services Industry Earnings Growth Rate	Market Cap Weighted Average	8.6%
Australia Commercial Services Industry Revenue Growth Rate	Market Cap Weighted Average	2.7%
Australia Market Earnings Growth Rate	Market Cap Weighted Average	6.9%
Australia Market Revenue Growth Rate	Market Cap Weighted Average	3.2%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations

Raw Data

ASX:DOW Analysts Growth Expectations Data Sources
Data Point	Source	Value
Past Financials	Company Filings (4 months ago)	See Below
Future Estimates	Average of up to 8 Analyst Estimates (S&P Global)	See Below

All numbers in AUD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.

ASX:DOW Future Estimates Data
Date (Data in AUD Millions)	Revenue	Cash Flow	Net Income *	Avg. No. Analysts
2023-06-30	15,303	711	293	1
2022-06-30	14,856	682	283	1
2021-06-30	14,024	671	313	5
2020-06-30	13,662	632	316	6
2019-06-30	13,247	687	295	6

ASX:DOW Past Financials Data
Date (Data in AUD Millions)	Revenue	Cash Flow	Net Income *
2018-12-31	12,552	632	209
2018-09-30	12,292	607	136
2018-06-30	12,031	583	63
2018-03-31	10,884	544	74
2017-12-31	9,736	505	84
2017-09-30	8,502	473	128
2017-06-30	7,268	442	173
2017-03-31	7,094	477	175
2016-12-31	6,920	513	178
2016-09-30	6,885	481	174
2016-06-30	6,850	448	171
2016-03-31	6,878	427	174

*GAAP earnings excluding extraordinary items.

High Growth Checks

Downer EDI's earnings are expected to grow by 2.2% yearly, however this is not considered high growth (20% yearly).
Downer EDI's revenue is expected to grow by 3.6% yearly, however this is not considered high growth (20% yearly).

Past and Future Earnings per Share

The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.

Raw Data

ASX:DOW Past and Future Earnings per Share
Data Point	Source	Value
Past Financials	Company Filings (4 months ago)	See Below
Future Estimates	Average of up to 8 Analyst Estimates (S&P Global)	See Below

All data from Downer EDI Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

ASX:DOW Future Estimates Data
Date (Data in AUD Millions)	EPS *	EPS High Estimate	EPS Low Estimate	Avg. No. Analysts
2023-06-30	0.54	0.54	0.54	1.00
2022-06-30	0.51	0.51	0.51	1.00
2021-06-30	0.52	0.57	0.48	4.00
2020-06-30	0.53	0.61	0.48	6.00
2019-06-30	0.49	0.52	0.48	6.00

ASX:DOW Past Financials Data
Date (Data in AUD Millions)	EPS *
2018-12-31	0.35
2018-09-30	0.23
2018-06-30	0.11
2018-03-31	0.13
2017-12-31	0.15
2017-09-30	0.25
2017-06-30	0.36
2017-03-31	0.37
2016-12-31	0.39
2016-09-30	0.38
2016-06-30	0.38
2016-03-31	0.40

*GAAP earnings excluding extraordinary items.

Performance in 3 years

In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.

Downer EDI is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).

Future performance checks

We assess Downer EDI's future performance by looking at:

Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Australia market? (1 check)
Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Australia market? (1 check)
Is the annual earnings growth rate expected to be above 20%? (1 check)
Is the annual revenue growth rate expected to be above 20%? (1 check)
Is the Return on Equity in 3 years expected to be over 20%? (1 check)

Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Downer EDI has a total score of 1/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

How has Downer EDI performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.

Past earnings growth

Below we compare Downer EDI's growth in the last year to its industry (Commercial Services).

Past Earnings growth analysis

We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.

Downer EDI's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.
Downer EDI's 1-year earnings growth exceeds its 5-year average (148.6% vs -11.8%)
Downer EDI's earnings growth has exceeded the AU Commercial Services industry average in the past year (148.6% vs 13.5%).

Earnings and Revenue History

Downer EDI's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.

Raw Data

All data from Downer EDI Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

ASX:DOW Past Revenue, Cash Flow and Net Income Data
Date (Data in AUD Millions)	Revenue	Net Income *	G+A Expenses
2018-12-31	12,552.30	208.60	81.80
2018-09-30	12,291.60	136.00	81.80
2018-06-30	12,030.90	63.40	81.80
2018-03-31	10,883.50	73.65	76.00
2017-12-31	9,736.10	83.90	70.20
2017-09-30	8,501.85	128.40	70.20
2017-06-30	7,267.60	172.90	70.20
2017-03-31	7,093.80	175.25	68.50
2016-12-31	6,920.00	177.60	66.80
2016-09-30	6,885.00	174.30	66.80
2016-06-30	6,850.00	171.00	66.80
2016-03-31	6,878.35	174.20	67.55
2015-12-31	6,906.70	177.40	68.30
2015-09-30	6,963.30	188.45	68.30
2015-06-30	7,019.90	199.50	68.30
2015-03-31	7,005.87	200.62	-24.25
2014-12-31	6,991.85	201.73	-116.80
2014-09-30	7,181.72	204.37	-21.60
2014-06-30	7,371.60	207.00	73.60
2014-03-31	7,689.22	203.85	235.67
2013-12-31	8,006.84	200.70	397.75
2013-09-30	8,391.61	198.50	401.19
2013-06-30	8,776.38	196.30	404.64
2012-12-31	8,825.76	106.38	380.72
2012-09-30	8,370.59	101.39	362.48
2012-06-30	7,915.41	96.39	344.24

*GAAP earnings excluding extraordinary items.

Performance last year

We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.

Downer EDI has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
Downer EDI used its assets less efficiently than the AU Commercial Services industry average last year based on Return on Assets.
Downer EDI's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).

Past performance checks

We assess Downer EDI's performance over the past 5 years by checking for:

Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the Commercial Services industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)

The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Downer EDI has a total score of 2/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

How is Downer EDI's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Downer EDI's finances.

The net worth of a company is the difference between its assets and liabilities.

Net Worth

Downer EDI is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Downer EDI's cash and other short term assets cover its long term commitments.

Balance sheet

This treemap shows a more detailed breakdown of Downer EDI's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.

Assets

Liabilities and shares

The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.

High level of physical assets or inventory.
Debt is covered by short term assets, assets are 2x debt.

Historical Debt

Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.

Raw Data

All data from Downer EDI Company Filings, last reported 4 months ago.

ASX:DOW Past Debt and Equity Data
Date (Data in AUD Millions)	Total Equity	Total Debt	Cash & Short Term Investments
2018-12-31	3,015.30	1,436.00	550.80
2018-09-30	3,015.30	1,436.00	550.80
2018-06-30	3,205.10	1,534.40	616.20
2018-03-31	3,205.10	1,534.40	616.20
2017-12-31	3,206.10	1,518.30	510.30
2017-09-30	3,206.10	1,518.30	510.30
2017-06-30	3,586.50	1,453.10	854.40
2017-03-31	3,586.50	1,453.10	854.40
2016-12-31	2,118.40	636.70	614.50
2016-09-30	2,118.40	636.70	614.50
2016-06-30	2,088.50	652.10	579.20
2016-03-31	2,088.50	652.10	579.20
2015-12-31	2,056.50	672.20	502.30
2015-09-30	2,056.50	672.20	502.30
2015-06-30	2,035.30	541.70	382.00
2015-03-31	2,035.30	541.70	382.00
2014-12-31	1,995.58	620.68	394.24
2014-09-30	1,995.58	620.68	394.24
2014-06-30	1,962.00	456.70	441.80
2014-03-31	1,962.00	456.70	441.80
2013-12-31	1,897.27	525.03	381.49
2013-09-30	1,897.27	525.03	381.49
2013-06-30	1,826.57	714.23	490.52
2012-12-31	1,718.42	588.16	227.17
2012-09-30	1,718.42	588.16	227.17
2012-06-30	1,617.70	661.10	307.48

Downer EDI's level of debt (47.6%) compared to net worth is high (greater than 40%).
The level of debt compared to net worth has increased over the past 5 years (27.6% vs 47.6% today).
Debt is well covered by operating cash flow (44%, greater than 20% of total debt).
Interest payments on debt are well covered by earnings (EBIT is 5.3x coverage).

Show me more healthy companies in the Commercial Services industry

Financial health checks

We assess Downer EDI's financial health by checking for:

Are short term assets greater than short term liabilities? (1 check)
Are short term assets greater than long term liabilities? (1 check)
Has the debt to equity ratio increased in the past 5 years? (1 check)
Is the debt to equity ratio over 40%? (1 check)
Is the debt covered by operating cash flow? (1 check)
Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)

For companies that are loss making and have been so on average in the past we replace the last 2 checks with:

Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)

Full details on the Health part of the Simply Wall St company analysis model.

Dividends

What is Downer EDI's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.

Annual Dividend Income

3.53%

Current annual income from Downer EDI dividends. Estimated to be 4.06% next year.

If you bought A$2,000 of Downer EDI shares you are expected to receive A$71 in your first year as a dividend.

Dividend Amount

Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?

Downer EDI's pays a higher dividend yield than the bottom 25% of dividend payers in Australia (2.59%).
Downer EDI's dividend is below the markets top 25% of dividend payers in Australia (5.7%).

Annualized Historical and Future Dividends

It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.

Raw Data

ASX:DOW Annualized Past and Future Dividends
Data Point	Source	Value
Past Annualized Dividend Yield	S&P Global Market Data	See Below
Past Dividends per Share	Company Filings/ Annualized Dividend Payments	See Below
Future Dividends per Share Estimates	Average of up to 8 Analyst Estimates (S&P Global)	See Below
Australia Commercial Services Industry Average Dividend Yield	Market Cap Weighted Average of 11 Stocks	2.5%
Australia Market Average Dividend Yield	Market Cap Weighted Average of 414 Stocks	4.2%
Australia Minimum Threshold Dividend Yield	10th Percentile	1.6%
Australia Bottom 25% Dividend Yield	25th Percentile	2.6%
Australia Top 25% Dividend Yield	75th Percentile	5.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

ASX:DOW Future Dividends Estimate Data
Date (Data in A$)	Dividend per Share (annual)	Avg. No. Analysts
2023-06-30	0.35	2.00
2022-06-30	0.34	2.00
2021-06-30	0.34	7.00
2020-06-30	0.33	9.00
2019-06-30	0.30	9.00

ASX:DOW Past Annualized Dividends Data
Date (Data in A$)	Dividend per share (annual)	Avg. Yield (%)
2019-02-06	0.280	3.678
2018-08-16	0.280	3.949
2018-02-20	0.260	3.766
2017-08-28	0.240	3.519
2017-02-01	0.240	3.763
2016-08-04	0.240	4.295
2016-02-03	0.240	6.502
2015-08-06	0.240	6.890
2015-02-04	0.240	5.200
2014-08-05	0.240	5.352
2014-02-04	0.220	4.495
2013-09-05	0.220	4.594
2013-02-13	0.200	4.726
2012-02-20	0.000	0.000
2011-08-24	0.000	0.000
2011-03-07	0.000	0.000
2011-03-03	0.000	0.000
2010-08-19	0.291	6.486
2010-03-24	0.291	5.629
2009-08-20	0.290	3.458

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
Dividends per share have fallen over the past 10 years.

Current Payout to shareholders

What portion of Downer EDI's earnings are paid to the shareholders as a dividend.

Dividends paid are covered by earnings (1.3x coverage).

Future Payout to shareholders

Dividends after 3 years are expected to be covered by earnings (1.7x coverage).

Income/ dividend checks

We assess Downer EDI's dividend by checking for:

Firstly is the company paying a notable dividend (greater than 1.6%) - if not then the rest of the checks are ignored.
Is current dividend yield above the bottom 25% of dividend payers? (1 check)
Is current dividend yield above the top 25% of dividend payers? (1 check)
Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
If they have paid a dividend for 10 years has it increased in this time? (1 check)
How sustainable is the dividend, can Downer EDI afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)

Full details on the Dividends part of the Simply Wall St company analysis model.

Management

What is the CEO of Downer EDI's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.

CEO

Grant Fenn

COMPENSATION	A$5,133,181
AGE	53
TENURE AS CEO	8.8 years

CEO Bio

Mr. Grant Anthony Fenn, B Ec, CA has been the Chief Executive Officer and Managing Director of Downer EDI Limited since July 30, 2010. Mr. Fenn has over 30 years’ experience in operational management, strategic development and financial management. He held a number of senior roles at Qantas including Executive General Manager of Strategy and Investments and Executive General Manager of Associated Businesses, responsible for the Airports, Freight, Flight Catering and Qantas Holidays businesses. He served as the Chief Financial Officer of Downer EDI Limited from October 2009 to July 2010 and served as its Finance Director from July 1, 2010 to August 2010. He joined Downer in October 2009. He served as an Executive General Manager of Associated Businesses, Deputy Chief Financial Officer, Executive General Manager of Airports and Catering and Executive General Manager of Finance at Qantas Airways Limited and also served as its Executive General Manager of Strategy & Investments from October 2008 to October 1, 2009 and Executive General Manager of Freight Enterprises until October 1, 2008. He served as an Executive General Manager of Qantas Freight Enterprises Ltd. He served as the Chairman of Star Track Express. He serves as an Executive Director of Downer EDI Limited and a Director of Downer Construction (New Zealand) Limited. He is a Non-Executive Director of Sydney Airport Finance Company Pty Ltd. He has been a Non-Executive Director at Southern Cross Airports Corporation Holdings Ltd. since October 01, 2015, Spotless Group Holdings Limited since December 1, 2017 and Sydney Airport Limited since October 1, 2015. He worked at KPMG for eight years before he joined Qantas. He serves as a Non-Executive Director of Sydney Airport Corporation Limited. He has been a Director of Works Finance (NZ) Limited since June 17, 2010. He served as Director of Downer Utilities Australia Pty Ltd. since October 01, 2014. He served as a Director of Australian Air Express. He is a Member of the UTS Engineering and IT Industry Advisory Board. He served as a Director of Downer New Zealand Limited until August 09, 2016, Downer Group Finance Pty Limited until April 27, 2016 and Kdr Victoria Pty Ltd until October 30, 2013. He is a Member of the Australian Institute of Chartered Accountants. Mr. Fenn holds a Bachelor of Economics from Macquarie University.

CEO Compensation

Grant's compensation has been consistent with company performance over the past year, both up more than 20%.
Grant's remuneration is higher than average for companies of similar size in Australia.

Management Team Tenure

Average tenure of the Downer EDI management team in years:

3.3

Average Tenure

The tenure for the Downer EDI management team is about average.

Management Team

Grant Fenn

4.3 yrs

Julie Wills

TITLE

Group Head of Zero Harm

TENURE

4.3 yrs

Board of Directors Tenure

Average tenure and age of the Downer EDI board of directors in years:

Average Tenure

Average Age

The tenure for the Downer EDI board of directors is about average.

Board of Directors

Mike Harding

TITLE

Independent Non Executive Chairman

COMPENSATION

A$411K

AGE

69

TENURE

Recent Insider Trading

No 3 month insider trading information.

Recent Insider Transactions

Announced	Type	Name	Entity	Start	End	Shares	Max Price (A$)	Value (A$)
07. May 19	Sell	Vinva Investment Management	Company	19. Feb 19	03. May 19	-1,609,884	A$7.62	A$-12,267,516
07. May 19	Buy	Vinva Investment Management	Company	19. Feb 19	03. May 19	1,892,280	A$7.81	A$14,785,219
09. Apr 19	Sell	FIL Limited	Company	15. Aug 18	22. Feb 19	-1,117,567	A$7.40	A$0
09. Apr 19	Buy	FIL Limited	Company	04. May 18	07. Jan 19	4,882,627	A$7.50	A$0
20. Feb 19	Sell	Vinva Investment Management	Company	08. Feb 19	18. Feb 19	-194,650	A$7.33	A$-1,426,569
20. Feb 19	Buy	Vinva Investment Management	Company	08. Feb 19	18. Feb 19	21,917	A$7.18	A$157,413
11. Feb 19	Sell	New York Life Investment Management LLC	Company	17. May 18	07. Feb 19	-6,625,715	A$6.63	A$-43,902,356
11. Feb 19	Buy	New York Life Investment Management LLC	Company	07. May 18	22. Jan 19	5,614,572	A$7.33	A$41,174,271
11. Feb 19	Sell	Vinva Investment Management	Company	07. Oct 18	07. Feb 19	-2,728,000	A$6.93	A$-18,906,258
11. Feb 19	Buy	Vinva Investment Management	Company	07. Oct 18	07. Feb 19	12,458,161	A$6.86	A$85,444,409
15. Jan 19	Sell	Nationwide Fund Advisors	Company	05. Dec 18	05. Dec 18	-14,837	A$6.27	A$-93,097
15. Jan 19	Buy	Nationwide Fund Advisors	Company	20. Jun 18	27. Jul 18	81,269	A$7.00	A$569,112
15. Jan 19	Sell	Columbia Management Investment Advisers, LLC	Company	18. Dec 18	18. Dec 18	-79,616	A$6.63	A$-527,460
15. Jan 19	Buy	Columbia Management Investment Advisers, LLC	Company	11. Oct 17	15. Nov 18	217,329	A$7.07	A$1,537,365
15. Jan 19	Buy	M Fund, Inc. - M International Equity Fund	Company	18. Dec 18	18. Dec 18	4,400	A$6.65	A$29,251
15. Jan 19	Sell	Dimensional Fund Advisors L.P.	Company	09. Dec 15	14. Jan 19	-8,898,857	A$7.44	A$-54,862,174
15. Jan 19	Buy	Dimensional Fund Advisors L.P.	Company	14. Oct 15	18. Dec 18	7,598,611	A$7.45	A$45,625,936
02. Jan 19	Sell	AustralianSuper Pty Ltd	Company	11. Oct 18	07. Dec 18	-22,524	A$7.21	A$-162,399
02. Jan 19	Buy	AustralianSuper Pty Ltd	Company	09. Oct 18	21. Dec 18	1,961,172	A$7.58	A$14,865,683
16. Dec 18	Sell	The Vanguard Group, Inc.	Company	15. Aug 18	30. Nov 18	-118,368	A$7.81	A$-923,873
16. Dec 18	Buy	The Vanguard Group, Inc.	Company	13. Aug 18	12. Dec 18	1,754,915	A$7.94	A$13,934,024
14. Nov 18	Buy	Nicole Hollows	Individual	13. Nov 18	13. Nov 18	3,000	A$6.92	A$20,760
04. Nov 18	Buy	Richard Harding	Individual	02. Nov 18	02. Nov 18	14,646	A$6.82	A$99,884
06. Jul 18	Sell	AustralianSuper Pty Ltd	Company	11. Apr 18	03. Jul 18	-17,313,307	A$7.39	A$-127,945,340
06. Jul 18	Buy	AustralianSuper Pty Ltd	Company	06. Apr 18	03. Jul 18	10,827,212	A$7.32	A$79,255,194

Management checks

We assess Downer EDI's management by checking for:

Is the CEO's compensation unreasonable compared to market cap? (1 check)
Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
Is the average tenure of the management team less than 2 years? (1 check)
Is the average tenure of the board of directors team less than 3 years? (1 check)

Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Did Business Growth Power Downer EDI's (ASX:DOW) Share Price Gain of 112%?

For instance the Downer EDI Limited (ASX:DOW) share price is 112% higher than it was three years ago. … One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. … During the three years of share price growth, Downer EDI actually saw its earnings per share (EPS) drop 5.3% per year.

Simply Wall St - 2 weeks ago – Full article

What Does Downer EDI Limited's (ASX:DOW) P/E Ratio Tell You?

This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). … We'll apply a basic P/E ratio analysis to Downer EDI Limited's (ASX:DOW), to help you decide if the stock is worth further research. … Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)

Simply Wall St - 3 weeks ago – Full article

Is Downer EDI Limited's (ASX:DOW) Balance Sheet Strong Enough To Weather A Storm?

While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. … Assessing first and foremost the financial health is. … Let's work through some financial health checks you may wish to consider if you're interested in this stock.

Simply Wall St - 1 month ago – Full article

Why Dividend Hunters Love Downer EDI Limited (ASX:DOW)

Downer EDI Limited (ASX:DOW) has pleased shareholders over the past 10 years, by paying out dividends. … The stock currently pays out a dividend yield of 3.6%, and has a market cap of AU$4.5b. … 5 checks you should do on a dividend stock

Simply Wall St - 1 month ago – Full article

What Kind Of Investor Owns Most Of Downer EDI Limited (ASX:DOW)?

Generally speaking, as a company grows, institutions will increase their ownership. … Our analysis of the ownership of the company, below, shows that. … institutional investors have bought into the company.

Simply Wall St - 1 month ago – Full article

Are Downer EDI Limited's (ASX:DOW) Interest Costs Too High?

Mid-caps stocks, like Downer EDI Limited (ASX:DOW) with a market capitalization of AU$4.6b, aren’t the focus of most investors who prefer to direct their investments towards either large-cap or small-cap stocks. … DOW’s financial liquidity and debt position will be analysed in this article, to get an idea of whether the company can fund opportunities for strategic growth and maintain strength through economic downturns. … Don’t forget that this is a general and concentrated examination of Downer EDI’s financial health, so you should conduct further analysis.

Simply Wall St - 1 month ago – Full article

Brief Commentary On Downer EDI Limited's (ASX:DOW) Fundamentals

Downer EDI Limited (ASX:DOW) is a stock with outstanding fundamental characteristics. … When we build an investment case, we need to look at the stock with a holistic perspective. … that has been able to sustain great financial health over the past

Simply Wall St - 2 months ago – Full article

Downer EDI Limited (ASX:DOW): Will The Growth Last?

On 31 December 2018, Downer EDI Limited (ASX:DOW) released its earnings update. … the consensus outlook from analysts appear fairly confident, … the past 5-year average growth rate of -12%.

Simply Wall St - 2 months ago – Full article

Taking A Look At Downer EDI Limited's (ASX:DOW) ROE

While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. … That means that for every A$1 worth of shareholders' equity, it generated A$0.076 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St - 2 months ago – Full article

Is Downer EDI Limited's (ASX:DOW) CEO Being Overpaid?

This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. … Next, we'll consider growth that the business demonstrates. … How Does Grant Fenn's Compensation Compare With Similar Sized Companies?

Simply Wall St - 3 months ago – Full article

Company Info

Description

Downer EDI Limited operates as a services provider in Australia, New Zealand, the Asia-Pacific, South America, and Southern Africa. Its Transport segment engages in road, rail infrastructure, bridge, airport, and port businesses; and provides earthworks, civil construction, asset management, maintenance, surfacing and stabilization, open space and facilities management, and rail track signaling and electrification works services, as well as supplying bituminous products and logistics services. Its Utilities segment plans, designs, constructs, operates, maintains, manages, and decommissions power and gas network assets, as well as operates in the renewable energy business; provides pipeline bursting and civil maintenance solutions for municipal and industrial water users; and designs, builds, and maintains wind farms and turbine sites, and solar farms. This segment also offers feasibility, design, civil and network construction, commissioning, testing, and operation and maintenance services for fiber, copper, and radio networks; and data center, automated ticketing, and intelligent transport technology services. Its Rail segment offers passenger build, operations and maintenance, component overhauls, and after-market services. Its Engineering, Construction and Maintenance segment provides design, engineering, construction, and maintenance services for greenfield and brownfield projects for various sectors in a range of stages of the project lifecycle. Its Mining segment provides asset management, blasting, crushing, exploration drilling, mine closure and site rehabilitation, mobile plant maintenance, open cut mining, tyre management, and underground mining services; supplies explosives; undertakes civil projects; and trains and develops ATSI employees. Its Spotless segment offers outsourced facility, catering and laundry, and technical and engineering services, as well as refrigeration solutions. The company is headquartered in North Ryde, Australia.

Details

Name:	Downer EDI Limited
Ticker:	DOW
Exchange:	ASX
Founded:
Market Cap:	A$4,677,317,992
Shares outstanding:	591,317,066
Website:	http://www.downergroup.com
Address:	Downer EDI Limited Triniti Business Campus, Level 2, North Ryde, New South Wales, 2113, Australia

Listings

Exchange Symbol	Ticker Symbol	Security	Exchange	Country	Currency	Listed on
ASX	DOW	Ordinary Shares	Australian Securities Exchange	AU	AUD	01. Jun 1998
OTCPK	DNER.F	Ordinary Shares	Pink Sheets LLC	US	USD	01. Jun 1998
DB	DNE	Ordinary Shares	Deutsche Boerse AG	DE	EUR	01. Jun 1998
CHIA	DOW	Ordinary Shares	Chi-X Australia	AU	AUD	01. Jun 1998

Number of employees

Current staff

53,000

Downer EDI employees.

Industry

Industry:	Diversified Support Services
Sector:	Commercial Services

Company Analysis and Financial Data Status

Area	Date (UTC time)
Company Analysis updated:	2019/05/22 10:31
End of day share price update:	2019/05/22 00:00
Last estimates confirmation:	2019/05/14
Last earnings filing:	2019/02/07
Last earnings reported:	2018/12/31
Last annual earnings reported:	2018/06/30

All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

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Copyright © 2019, Standard & Poor’s Financial Services LLC. Reproduction of S&P Capital IQ in any form is prohibited except with the prior written permission of S&P. S&P does not guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions, regardless of the cause or for the results obtained from the use of such information. S&P DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P be liable for any direct, indirect, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with subscriber’s or others’ use of S&P Capital IQ. (2019)

Downer EDI

DOW Share Price and Events

7 Day Returns

1 Year Returns

DOW Shareholder Return

1 Year Return vs Industry and Market

Price Volatility

Related Companies

James Hardie Industries

BlueScope Steel

Boral

Value

INTRINSIC VALUE BASED ON FUTURE CASH FLOWS

PRICE RELATIVE TO MARKET

Price based on past earnings

Price based on expected Growth

Price based on value of assets

Value checks

Future Performance

Earnings growth vs Low Risk Savings

Growth vs Market Checks

Annual Growth Rates Comparison

Analysts growth expectations

High Growth Checks

Past and Future Earnings per Share

Performance in 3 years

Future performance checks

Past Performance

Past earnings growth

Past Earnings growth analysis

Earnings and Revenue History

Performance last year

Past performance checks

Health

Net Worth

Balance sheet

Assets

Liabilities and shares

Historical Debt

Financial health checks

Dividends

Annual Dividend Income

Dividend Amount

Annualized Historical and Future Dividends

Current Payout to shareholders

Future Payout to shareholders

Income/ dividend checks

Management

CEO

CEO Bio

CEO Compensation

Management Team Tenure

Management Team

Grant Fenn

MD, CEO & Director

A$5M

53

8.8 yrs

Michael Ferguson

Chief Financial Officer

A$2M

2.6 yrs

Sergio Cinerari

Chief Executive Officer of Transport & Infrastructure

A$3M

4.3 yrs

Brendan Petersen

Chief Executive Officer of Mining

A$2M

3.3 yrs

Steve Killeen

Chief Executive Officer of New Zealand Business

A$1M

2.3 yrs

Michael Sharp

Group Head of Corporate Affairs & Investors Relations

Robert Regan

Group General Counsel & Company Secretary

0.3 yrs

Steve Schofield