DB:DDL

Stock Analysis Report

Executive Summary

Daido Steel Co., Ltd. manufactures and sells steel products in Japan, rest of Asia, North America, and internationally.

Rewards

PE ratio (8.9x) is below the German market (20.9x)

Earnings are forecast to grow 1.15% per year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record



Snowflake Analysis

Fair value with mediocre balance sheet.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: DDL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.8%

DDL

-6.3%

DE Metals and Mining

0.1%

DE Market


1 Year Return

-4.0%

DDL

-18.4%

DE Metals and Mining

14.1%

DE Market

Return vs Industry: DDL exceeded the German Metals and Mining industry which returned -14% over the past year.

Return vs Market: DDL underperformed the German Market which returned 15.1% over the past year.


Shareholder returns

DDLIndustryMarket
7 Day-3.8%-6.3%0.1%
30 Day-5.9%-10.5%0.2%
90 Day-14.2%-16.7%3.3%
1 Year-1.3%-4.0%-17.5%-18.4%17.6%14.1%
3 Year-19.6%-25.1%-46.4%-48.0%14.8%4.8%
5 Year-0.2%-10.2%-43.3%-46.2%22.2%5.4%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

8.87x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DDL (€35) is trading above our estimate of fair value (€34.44)

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


Price To Earnings Ratio

PE vs Industry: DDL is good value based on its PE Ratio (8.9x) compared to the Metals and Mining industry average (9.8x).

PE vs Market: DDL is good value based on its PE Ratio (8.9x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: DDL is poor value based on its PEG Ratio (7.7x)


Price to Book Ratio

PB vs Industry: DDL is good value based on its PB Ratio (0.6x) compared to the DE Metals and Mining industry average (4.2x).


Next Steps

Future Growth

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

1.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DDL's forecast earnings growth (1.2% per year) is above the savings rate (-0.4%).

Earnings vs Market: DDL's earnings (1.2% per year) are forecast to grow slower than the German market (13.3% per year).

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

Revenue vs Market: DDL's revenue (1.8% per year) is forecast to grow slower than the German market (5% per year).

High Growth Revenue: DDL's revenue (1.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DDL's Return on Equity is forecast to be low in 3 years time (6.1%).


Next Steps

Past Performance

How has Daido Steel performed over the past 5 years?

21.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DDL has high quality earnings.

Growing Profit Margin: DDL's current net profit margins (4.1%) are lower than last year (4.1%).


Past Earnings Growth Analysis

Earnings Trend: DDL's earnings have grown significantly by 21.6% per year over the past 5 years.

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

Earnings vs Industry: DDL had negative earnings growth (-7.9%) over the past year, making it difficult to compare to the Metals and Mining industry average (-11.3%).


Return on Equity

High ROE: DDL's Return on Equity (6.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Daido Steel's financial position?


Financial Position Analysis

Short Term Liabilities: DDL's short term assets (¥308.3B) exceed its short term liabilities (¥185.6B).

Long Term Liabilities: DDL's short term assets (¥308.3B) exceed its long term liabilities (¥137.9B).


Debt to Equity History and Analysis

Debt Level: DDL's debt to equity ratio (57.1%) is considered high.

Reducing Debt: DDL's debt to equity ratio has increased from 53.8% to 57.1% over the past 5 years.

Debt Coverage: DDL's debt is not well covered by operating cash flow (17.1%).

Interest Coverage: DDL earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: DDL has a high level of physical assets or inventory.

Debt Coverage by Assets: DDL's debt is covered by short term assets (assets are 1.6x debt).


Next Steps

Dividend

What is Daido Steel's current dividend yield, its reliability and sustainability?

2.80%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Daido Steel before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.8%marketbottom25%1.3%markettop25%3.6%industryaverage6.5%forecastin3Years2.7%

Current dividend yield vs market & industry

Notable Dividend: DDL's dividend (2.8%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: DDL's dividend (2.8%) is low compared to the top 25% of dividend payers in the German market (3.59%).


Stability and Growth of Payments

Stable Dividend: DDL's dividend payments have been volatile in the past 10 years.

Growing Dividend: DDL's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (24.8%), DDL's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

3.6yrs

Average management tenure


CEO

Takeshi Ishiguro (62yo)

3.6yrs

Tenure

0

Mr. Takeshi Ishiguro has been Chief Executive Officer and President at Daido Steel Co. Ltd since July 5, 2016. Mr. Ishiguro served as Executive Vice President of Daido Steel Co. Ltd until July 5, 2016. Mr. ...


Leadership Team

NamePositionTenureCompensationOwnership
Tadashi Shimao
Chairperson of the Board3.6yrsno data0.015% ¥234.5k
Takeshi Ishiguro
President3.6yrsno data0.011% ¥169.6k
Tsukasa Nishimura
Executive VP & Representative Executive Director0yrsno data0.0087% ¥133.5k
Kazuto Tachibana
Executive VP & Representative Executive Director3.6yrsno data0.0087% ¥133.5k
Kazuhiko Hirabayashi
Managing Executive Officer3.6yrsno datano data
Hajime Amano
Managing Executive Officer & Director1.7yrsno data0.0042% ¥64.9k
Yoshiaki Mori
Managing Executive Officer0yrsno datano data
Hirotaka Yoshinaga
Managing Executive Officer1.7yrsno datano data
Hiroshi Matsui
Executive Officer3.6yrsno datano data
Takaaki Taketsuru
Managing Executive Officer0yrsno datano data

3.6yrs

Average Tenure

62yo

Average Age

Experienced Management: DDL's management team is considered experienced (3.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Tadashi Shimao
Chairperson of the Board3.6yrsno data0.015% ¥234.5k
Takeshi Ishiguro
President3.6yrsno data0.011% ¥169.6k
Tsukasa Nishimura
Executive VP & Representative Executive Director0yrsno data0.0087% ¥133.5k
Kazuto Tachibana
Executive VP & Representative Executive Director3.6yrsno data0.0087% ¥133.5k
Hajime Amano
Managing Executive Officer & Director1.7yrsno data0.0042% ¥64.9k
Satoshi Yoshida
Director & Managing Executive Officer2.7yrsno data0.0052% ¥79.4k
Akihito Kajita
Director Executive Officer0.5yrsno data0.00094% ¥14.5k
Hitoshi Tanemura
Outside Director0yrsno data0.0040% ¥61.4k
Shuji Soma
Outside Director0.6yrsno datano data
Mutsuko Jinbo
Outside Director0.6yrsno datano data

1.7yrs

Average Tenure

62yo

Average Age

Experienced Board: DDL's board of directors are not considered experienced ( 1.7 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: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

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


Top Shareholders

Company Information

Daido Steel Co., Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Daido Steel Co., Ltd.
  • Ticker: DDL
  • Exchange: DB
  • Founded: 1916
  • Industry: Steel
  • Sector: Materials
  • Market Cap: JP¥182.665b
  • Listing Market Cap: JP¥1.538b
  • Shares outstanding: 42.63m
  • Website: https://www.daido.co.jp

Number of Employees


Location

  • Daido Steel Co., Ltd.
  • Urbannet Nagoya Building
  • 1-10, Higashisakura 1-chome
  • Nagoya
  • Aichi
  • 461-8581
  • Japan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
5471TSE (The Tokyo Stock Exchange)YesCommon StockJPJPYJan 1992
DDLDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1992

Biography

Daido Steel Co., Ltd. manufactures and sells steel products in Japan, rest of Asia, North America, and internationally. The company’s Specialty Steel segment manufactures specialty steel for automotive parts, industrial machinery parts, electrical machinery parts, construction, tool steel, etc. Its High Performance Materials and Magnetic Materials segment offers stainless steel, nickel-based alloys, electrical and electronics parts, magnetic material products, alloy powders, titanium products, and welding wires. The company’s Parts For Automobile and Industrial Equipment segment provides die forgings, precise hot forgings, and welded parts, including automotive parts and bearing races; open die forgings, such as parts for boats and ships, industrial machines, heavy electric machines, steel making equipment, chemical equipment, oil drilling rigs, and spacecraft and aircraft; and castings that comprise manganese railway rails, components for automobiles, industrial machines, electric machines and furnaces, cast steel products, etc. This segment also offers precision castings that include automotive, industrial machines, electric machines, telecommunications equipment, etc.; and engine valves, compressors, hydraulic equipment, and machine tool parts. Its Engineering segment provides steel making equipment; industrial furnaces and facilities; environmental equipment for drainage, exhaust, waste disposal, and treatment facilities; machine tools; and machine maintenance services. The company’s Trading and Service segment engages in the provision of welfare services; real estate and insurance business; and golf course management, analysis, and outside software sales businesses. Daido Steel Co., Ltd. was founded in 1916 and is headquartered in Nagoya, Japan. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 21:55
End of Day Share Price2020/02/18 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


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.