TSX:DOL

Stock Analysis Report

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Market Cap

CA$17.0b

Last Updated

2021/06/13 06:57 UTC

Data Sources

Company Financials +

Executive Summary

Dollarama Inc. operates a chain of dollar stores in Canada. More Details


Snowflake Analysis

Acceptable track record with limited growth.


Similar Companies

Share Price & News

How has Dollarama's share price performed over time and what events caused price changes?


Latest Share Price and Events

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

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


Market Performance


7 Day Return

3.4%

DOL

1.3%

CA Multiline Retail

0.4%

CA Market


1 Year Return

16.4%

DOL

59.0%

CA Multiline Retail

37.2%

CA Market

Return vs Industry: DOL underperformed the Canadian Multiline Retail industry which returned 59% over the past year.

Return vs Market: DOL underperformed the Canadian Market which returned 37.2% over the past year.


Shareholder returns

DOLIndustryMarket
7 Day3.4%1.3%0.4%
30 Day5.1%6.2%4.7%
90 Day9.4%15.0%6.1%
1 Year16.8%16.4%60.7%59.0%41.6%37.2%
3 Year9.4%8.1%95.5%84.1%32.5%20.0%
5 Year89.1%85.6%141.3%117.7%62.7%38.3%

Long-Term Price Volatility Vs. Market

How volatile is Dollarama's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

29.25x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DOL (CA$55.75) is trading above our estimate of fair value (CA$54.68)

Significantly Below Fair Value: DOL is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: DOL is poor value based on its PE Ratio (29.2x) compared to the North American Multiline Retail industry average (17.5x).

PE vs Market: DOL is poor value based on its PE Ratio (29.2x) compared to the Canadian market (15.2x).


Price to Earnings Growth Ratio

PEG Ratio: DOL is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: DOL is overvalued based on its PB Ratio (122.8x) compared to the XN Multiline Retail industry average (3.2x).


Future Growth

How is Dollarama forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

12.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DOL's forecast earnings growth (12.7% per year) is above the savings rate (1.5%).

Earnings vs Market: DOL's earnings (12.7% per year) are forecast to grow slower than the Canadian market (13.5% per year).

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

Revenue vs Market: DOL's revenue (7.6% per year) is forecast to grow faster than the Canadian market (5.7% per year).

High Growth Revenue: DOL's revenue (7.6% 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 DOL's Return on Equity is forecast to be high in 3 years time


Past Performance

How has Dollarama performed over the past 5 years?

6.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DOL has high quality earnings.

Growing Profit Margin: DOL's current net profit margins (14.3%) are lower than last year (14.4%).


Past Earnings Growth Analysis

Earnings Trend: DOL's earnings have grown by 6.4% per year over the past 5 years.

Accelerating Growth: DOL's earnings growth over the past year (8.2%) exceeds its 5-year average (6.4% per year).

Earnings vs Industry: DOL earnings growth over the past year (8.2%) underperformed the Multiline Retail industry 94.6%.


Return on Equity

High ROE: Whilst DOL's Return on Equity (421.27%) is outstanding, this metric is skewed due to their high level of debt.


Financial Health

How is Dollarama's financial position?


Financial Position Analysis

Short Term Liabilities: DOL's short term assets (CA$729.1M) do not cover its short term liabilities (CA$1.2B).

Long Term Liabilities: DOL's short term assets (CA$729.1M) do not cover its long term liabilities (CA$2.6B).


Debt to Equity History and Analysis

Debt Level: DOL's debt to equity ratio (1226.6%) is considered high.

Reducing Debt: DOL's debt to equity ratio has increased from 328.6% to 1226.6% over the past 5 years.

Debt Coverage: DOL's debt is well covered by operating cash flow (48.7%).

Interest Coverage: DOL's interest payments on its debt are well covered by EBIT (9.6x coverage).


Balance Sheet


Dividend

What is Dollarama current dividend yield, its reliability and sustainability?

0.36%

Current Dividend Yield


Upcoming Dividend Payment

TodayJun 13 2021Ex Dividend DateJul 08 2021Dividend Pay DateAug 06 202129 days from Ex DividendBuy in the next 25 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: DOL's dividend (0.36%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.53%).

High Dividend: DOL's dividend (0.36%) is low compared to the top 25% of dividend payers in the Canadian market (4.45%).


Stability and Growth of Payments

Stable Dividend: DOL is not paying a notable dividend for the Canadian market, therefore no need to check if payments are stable.

Growing Dividend: DOL is not paying a notable dividend for the Canadian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: DOL is not paying a notable dividend for the Canadian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of DOL's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

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

5.1yrs

Average management tenure


CEO

Neil Rossy (50 yo)

5.08yrs

Tenure

CA$6,831,132

Compensation

Mr. Neil Rossy has been the Chief Executive Officer and President of Dollarama Inc. since May 1, 2016. Mr. Rossy served as Chief Merchandising Officer at Dollarama Inc. since 2004 until April 2016 and its ...


CEO Compensation Analysis

Compensation vs Market: Neil's total compensation ($USD5.62M) is about average for companies of similar size in the Canadian market ($USD6.56M).

Compensation vs Earnings: Neil's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: DOL's management team is seasoned and experienced (5.1 years average tenure).


Board Members

Experienced Board: DOL's board of directors are seasoned and experienced ( 10.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: DOL insiders have only sold shares 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

Dollarama Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Dollarama Inc.
  • Ticker: DOL
  • Exchange: TSX
  • Founded: 1992
  • Industry: General Merchandise Stores
  • Sector: Retail
  • Market Cap: CA$17.037b
  • Shares outstanding: 305.60m
  • Website: https://www.dollarama.com

Number of Employees


Location

  • Dollarama Inc.
  • 5805 Royalmount Avenue
  • Montreal
  • Quebec
  • H4P 0A1
  • Canada

Listings


Biography

Dollarama Inc. operates a chain of dollar stores in Canada. Its stores offer general merchandise, consumables, and seasonal items. The company also offers products online. As of January 31, 2021, it operat...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/13 06:57
End of Day Share Price2021/06/11 00:00
Earnings2021/05/02
Annual Earnings2021/01/31


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.