Dexterra Group (TSX:DXT) - Share price, News & Analysis

Q: What is the Fair Price of DXT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

DXT (CA$5.59) is trading below our estimate of [[fair value]] (CA$21.76)

DXT fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	4/6
Past Performance	2/6
Financial Health	4/6
Dividends	3/6

DXT Stock Overview

Dexterra Group Inc. provides support services for the creation, management, and operation of infrastructure in Canada.

Rewards

Trading at 74.3% below our estimate of its fair value

Earnings are forecast to grow 41.75% per year

Risk Analysis

Has a high level of debt

Dividend of 6.26% is not well covered by earnings

Profit margins (2.6%) are lower than last year (11.9%)

Dexterra Group Competitors

K-Bro Linen

TSX:KBL

CA$344.3m

Black Diamond Group

TSX:BDI

CA$226.4m

Calian Group

TSX:CGY

CA$746.8m

GDI Integrated Facility Services

TSX:GDI

CA$1.0b

Price History & Performance

Summary of all time highs, changes and price drops for Dexterra Group
Historical stock prices
Current Share Price	CA$5.59
52 Week High	CA$9.46
52 Week Low	CA$5.53
Beta	2.03
1 Month Change	-3.62%
3 Month Change	-29.86%
1 Year Change	-19.91%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	86.33%

Shareholder Returns

	DXT	CA Commercial Services	CA Market
7D	-3.3%	5.4%	0.1%
1Y	-19.9%	-21.1%	-2.6%

Return vs Industry: DXT exceeded the Canadian Commercial Services industry which returned -21.4% over the past year.

Return vs Market: DXT underperformed the Canadian Market which returned -4% over the past year.

Price Volatility

Is DXT's price volatile compared to industry and market?
DXT volatility
DXT Average Weekly Movement	5.3%
Commercial Services Industry Average Movement	7.8%
Market Average Movement	10.0%
10% most volatile stocks in CA Market	17.3%
10% least volatile stocks in CA Market	4.4%

Stable Share Price: DXT is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: DXT's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1985	6,248	John MacCuish	https://dexterra.com

Dexterra Group Inc. provides support services for the creation, management, and operation of infrastructure in Canada. It operates through three segments: Integrated Facilities Management; Modular Solutions; and Workforce Accommodations, Forestry and Energy Services (WAFES). The Integrated Facilities Management segment delivers operation and maintenance solutions for built assets and infrastructure in the public and private sectors, including aviation, defense, retail, healthcare, business and industry, education, rail, hotels and leisure, and government.

Dexterra Group Fundamentals Summary

How do Dexterra Group's earnings and revenue compare to its market cap?
DXT fundamental statistics
Market Cap	CA$369.67m
Earnings (TTM)	CA$20.97m
Revenue (TTM)	CA$801.94m

17.4x

P/E Ratio

0.5x

P/S Ratio

Is DXT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
DXT income statement (TTM)
Revenue	CA$801.94m
Cost of Revenue	CA$697.36m
Gross Profit	CA$104.57m
Other Expenses	CA$83.60m
Earnings	CA$20.97m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.32
Gross Margin	13.04%
Net Profit Margin	2.62%
Debt/Equity Ratio	43.6%

How did DXT perform over the long term?

See historical performance and comparison

Dividends

6.3%

Current Dividend Yield

105%

Payout Ratio

Does DXT pay a reliable dividends?

See DXT dividend history and benchmarks

When do you need to buy DXT by to receive an upcoming dividend?
Dexterra Group dividend dates
Ex Dividend Date	Jun 29 2022
Dividend Pay Date	Jul 15 2022
Days until Ex dividend	1 day
Days until Dividend pay date	17 days

Does DXT pay a reliable dividends?

See DXT dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is DXT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DXT?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for DXT. This is calculated by dividing DXT's market cap by their current preferred multiple.
What is DXT's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CA$369.67m

DXT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.7x
Enterprise Value/EBITDA	10.1x
PEG Ratio	0.4x

Price to Earnings Ratio vs Peers

How does DXT's PE Ratio compare to its peers?

DXT PE Ratio vs Peers

The above table shows the PE ratio for DXT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	43.9x
KBL K-Bro Linen	52.1x	55.2%	CA$344.3m
BDI Black Diamond Group	10.5x	14.2%	CA$226.4m
CGY Calian Group	85.6x	57.3%	CA$746.8m
GDI GDI Integrated Facility Services	27.1x	n/a	CA$1.0b
DXT Dexterra Group	17.4x	41.8%	CA$364.5m

Forward PE

Price-To-Earnings vs Peers: DXT is good value based on its Price-To-Earnings Ratio (17.4x) compared to the peer average (43.8x).

Price to Earnings Ratio vs Industry

How does DXT's PE Ratio compare vs other companies in the North American Commercial Services Industry?

Price-To-Earnings vs Industry: DXT is good value based on its Price-To-Earnings Ratio (17.4x) compared to the Canadian Commercial Services industry average (27.7x)

Price to Earnings Ratio vs Fair Ratio

What is DXT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DXT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	17.4x
Fair PE Ratio	34.3x

Price-To-Earnings vs Fair Ratio: DXT is good value based on its Price-To-Earnings Ratio (17.4x) compared to the estimated Fair Price-To-Earnings Ratio (34.2x).

Share Price vs Fair Value

What is the Fair Price of DXT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DXT (CA$5.59) is trading below our estimate of fair value (CA$21.76)

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

Price to Earnings Growth Ratio

PEG Ratio: DXT is good value based on its PEG Ratio (0.4x)

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Future Growth

How is Dexterra Group forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

41.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: DXT's forecast earnings growth (41.8% per year) is above the savings rate (1.6%).

Earnings vs Market: DXT's earnings (41.8% per year) are forecast to grow faster than the Canadian market (8.2% per year).

High Growth Earnings: DXT's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: DXT's revenue (11.1% per year) is forecast to grow faster than the Canadian market (6.9% per year).

High Growth Revenue: DXT's revenue (11.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if DXT's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Dexterra Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

15.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: DXT has high quality earnings.

Growing Profit Margin: DXT's current net profit margins (2.6%) are lower than last year (11.9%).

Past Earnings Growth Analysis

Earnings Trend: DXT's earnings have grown by 15.7% per year over the past 5 years.

Accelerating Growth: DXT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DXT had negative earnings growth (-68.9%) over the past year, making it difficult to compare to the Commercial Services industry average (-42.1%).

Return on Equity

High ROE: DXT's Return on Equity (7.1%) is considered low.

Discover strong past performing companies

Financial Health

How is Dexterra Group's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: DXT's short term assets (CA$249.5M) exceed its short term liabilities (CA$158.2M).

Long Term Liabilities: DXT's short term assets (CA$249.5M) exceed its long term liabilities (CA$160.5M).

Debt to Equity History and Analysis

Debt Level: DXT's net debt to equity ratio (43.6%) is considered high.

Reducing Debt: Insufficient data to determine if DXT's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: DXT's debt is well covered by operating cash flow (29.7%).

Interest Coverage: DXT's interest payments on its debt are well covered by EBIT (5.4x coverage).

Balance Sheet

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Dividend

What is Dexterra Group current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

6.26%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: DXT's dividend (6.26%) is higher than the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: DXT's dividend (6.26%) is in the top 25% of dividend payers in the Canadian market (5.33%)

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, DXT has been paying a dividend for less than 10 years.

Growing Dividend: DXT's dividend payments have increased, but the company has only paid a dividend for 2 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (104.8%), DXT's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (70.7%), DXT's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

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

1.9yrs

Average management tenure

CEO

John MacCuish (64 yo)

1.83yrs

Tenure

CA$1,987,527

Compensation

Mr. John Mac Cuish serves as President of Facilities Management & Non-Independent Director at Dexterra Group Inc. (formerly known as Horizon North Logistics Inc.). since May 29, 2020 and serves as its Chie...

CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD1.54M) is above average for companies of similar size in the Canadian market ($USD740.20K).

Compensation vs Earnings: John's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: DXT's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.

Board Members

Experienced Board: DXT's board of directors are not considered experienced ( 2.1 years average tenure), which suggests a new board.

Ownership

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

Insider Trading Volume

Insider Buying: DXT 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.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31