company background image
DOW

Downer EDIASX:DOW Stock Report

Market Cap

AU$4.0b

7D

3.0%

1Y

7.7%

Updated

06 Dec, 2021

Data

Company Financials +
DOW fundamental analysis
Snowflake Score
Valuation3/6
Future Growth2/6
Past Performance2/6
Financial Health4/6
Dividends3/6

DOW Stock Overview

Downer EDI Limited operates as an integrated services provider in Australia, New Zealand, the Asia-Pacific, South America, and Southern Africa.

Downer EDI Competitors

BSA

ASX:BSA

AU$111.2m

VINCI

ENXTPA:DG

€49.6b

Sodexo

ENXTPA:SW

€11.3b

South32

ASX:S32

AU$17.2b

Price History & Performance

Summary of all time highs, changes and price drops for Downer EDI
Historical stock prices
Current Share PriceAU$5.85
52 Week HighAU$6.87
52 Week LowAU$4.93
Beta1.59
1 Month Change-6.85%
3 Month Change-10.55%
1 Year Change7.74%
3 Year Change-3.31%
5 Year Change-4.57%
Change since IPO261.11%

Recent News & Updates

Dec 06
Is There Now An Opportunity In Downer EDI Limited (ASX:DOW)?

Is There Now An Opportunity In Downer EDI Limited (ASX:DOW)?

While Downer EDI Limited ( ASX:DOW ) might not be the most widely known stock at the moment, it saw significant share...

Oct 28
We Think The Compensation For Downer EDI Limited's (ASX:DOW) CEO Looks About Right

We Think The Compensation For Downer EDI Limited's (ASX:DOW) CEO Looks About Right

Performance at Downer EDI Limited ( ASX:DOW ) has been reasonably good and CEO Grant Fenn has done a decent job of...

Oct 26
Downer EDI (ASX:DOW) Has A Pretty Healthy Balance Sheet

Downer EDI (ASX:DOW) Has A Pretty Healthy Balance Sheet

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Sep 15
An Intrinsic Calculation For Downer EDI Limited (ASX:DOW) Suggests It's 40% Undervalued

An Intrinsic Calculation For Downer EDI Limited (ASX:DOW) Suggests It's 40% Undervalued

Does the September share price for Downer EDI Limited ( ASX:DOW ) reflect what it's really worth? Today, we will...

Shareholder Returns

DOWAU Commercial ServicesAU Market
7D3.0%2.0%-0.9%
1Y7.7%0.2%8.9%

Return vs Industry: DOW exceeded the Australian Commercial Services industry which returned 0.4% over the past year.

Return vs Market: DOW underperformed the Australian Market which returned 10.2% over the past year.

Price Volatility

Is DOW's price volatile compared to industry and market?
DOW volatility
DOW Average Weekly Movement3.2%
Commercial Services Industry Average Movement7.2%
Market Average Movement8.4%
10% most volatile stocks in AU Market15.6%
10% least volatile stocks in AU Market3.7%

Stable Share Price: DOW is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: DOW's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
198944,000Grant Fennhttps://www.downergroup.com

Downer EDI Limited operates as an integrated services provider in Australia, New Zealand, the Asia-Pacific, South America, and Southern Africa. Its Transport segment provides road network management; routine road maintenance; asset management systems; spray sealing; asphalt laying; and manufacture and supply of bitumen-based products and asphalt products. This segment also engages in the design and construction of light and heavy rail networks, signaling works, track and station works, and bridges; and provides rail safety technology, fleet maintenance, and overhaul services.

Downer EDI Fundamentals Summary

How do Downer EDI's earnings and revenue compare to its market cap?
DOW fundamental statistics
Market CapAU$4.00b
Earnings (TTM)AU$175.80m
Revenue (TTM)AU$11.54b

22.8x

P/E Ratio

0.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
DOW income statement (TTM)
RevenueAU$11.54b
Cost of RevenueAU$10.18b
Gross ProfitAU$1.37b
ExpensesAU$1.19b
EarningsAU$175.80m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

Feb 10, 2022

Earnings per share (EPS)0.26
Gross Margin11.84%
Net Profit Margin1.52%
Debt/Equity Ratio51.0%

How did DOW perform over the long term?

See historical performance and comparison

Dividends

4.1%

Current Dividend Yield

83%

Payout Ratio

Valuation

Is Downer EDI undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DOW (A$5.85) is trading below our estimate of fair value (A$15.83)

Significantly Below Fair Value: DOW is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: DOW is poor value based on its PE Ratio (22.8x) compared to the Australian Commercial Services industry average (20.9x).

PE vs Market: DOW is poor value based on its PE Ratio (22.8x) compared to the Australian market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: DOW is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: DOW is good value based on its PB Ratio (1.4x) compared to the AU Commercial Services industry average (2.5x).


Future Growth

How is Downer EDI forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

14.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DOW's forecast earnings growth (14.4% per year) is above the savings rate (1.9%).

Earnings vs Market: DOW's earnings (14.4% per year) are forecast to grow faster than the Australian market (11.8% per year).

High Growth Earnings: DOW's earnings are forecast to grow, but not significantly.

Revenue vs Market: DOW's revenue (2.4% per year) is forecast to grow slower than the Australian market (5.2% per year).

High Growth Revenue: DOW's revenue (2.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DOW's Return on Equity is forecast to be low in 3 years time (10.6%).


Past Performance

How has Downer EDI performed over the past 5 years?

-26.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DOW has high quality earnings.

Growing Profit Margin: DOW became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: DOW's earnings have declined by 26.5% per year over the past 5 years.

Accelerating Growth: DOW has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: DOW has become profitable in the last year, making it difficult to compare its past year earnings growth to the Commercial Services industry (7.9%).


Return on Equity

High ROE: DOW's Return on Equity (6.2%) is considered low.


Financial Health

How is Downer EDI's financial position?


Financial Position Analysis

Short Term Liabilities: DOW's short term assets (A$3.4B) exceed its short term liabilities (A$3.3B).

Long Term Liabilities: DOW's short term assets (A$3.4B) exceed its long term liabilities (A$1.8B).


Debt to Equity History and Analysis

Debt Level: DOW's net debt to equity ratio (23.5%) is considered satisfactory.

Reducing Debt: DOW's debt to equity ratio has increased from 29.9% to 51% over the past 5 years.

Debt Coverage: DOW's debt is well covered by operating cash flow (47%).

Interest Coverage: DOW's interest payments on its debt are not well covered by EBIT (2.9x coverage).


Balance Sheet


Dividend

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

4.10%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DOW's dividend (4.1%) is higher than the bottom 25% of dividend payers in the Australian market (2.28%).

High Dividend: DOW's dividend (4.1%) is low compared to the top 25% of dividend payers in the Australian market (5.6%).


Stability and Growth of Payments

Stable Dividend: DOW has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: DOW's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (82.8%), DOW's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DOW's dividends in 3 years are forecast to be covered by earnings (62.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.9yrs

Average management tenure


CEO

Grant Fenn (56 yo)

11.42yrs

Tenure

AU$3,313,168

Compensation

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 experience in operational management, strategic developme...


CEO Compensation Analysis

Compensation vs Market: Grant's total compensation ($USD2.33M) is above average for companies of similar size in the Australian market ($USD1.67M).

Compensation vs Earnings: Grant's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: DOW's management team is considered experienced (2.9 years average tenure).


Board Members

Experienced Board: DOW's board of directors are considered experienced (3.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Downer EDI Limited's employee growth, exchange listings and data sources


Key Information

  • Name: Downer EDI Limited
  • Ticker: DOW
  • Exchange: ASX
  • Founded: 1989
  • Industry: Diversified Support Services
  • Sector: Commercial Services
  • Market Cap: AU$4.001b
  • Shares outstanding: 683.90m
  • Website: https://www.downergroup.com

Number of Employees


Location

  • Downer EDI Limited
  • Triniti Business Campus
  • Level 2
  • Sydney
  • New South Wales
  • 2113
  • Australia

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/12/06 15:34
End of Day Share Price2021/12/06 00:00
Earnings2021/06/30
Annual Earnings2021/06/30


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.