DB:DR3

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Mediocre balance sheet and slightly overvalued.


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: DR3 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.3%

DR3

4.4%

DE Multiline Retail

-3.6%

DE Market


1 Year Return

-8.9%

DR3

-6.2%

DE Multiline Retail

3.7%

DE Market

Return vs Industry: DR3 underperformed the German Multiline Retail industry which returned -6.2% over the past year.

Return vs Market: DR3 underperformed the German Market which returned 3.8% over the past year.


Shareholder returns

DR3IndustryMarket
7 Day1.3%4.4%-3.6%
30 Day2.0%8.5%-2.0%
90 Day10.9%21.7%13.3%
1 Year-8.6%-8.9%-3.7%-6.2%6.0%3.7%
3 Year14.2%13.0%-1.3%-13.1%1.1%-6.9%
5 Year72.8%69.5%-29.8%-44.1%7.8%-6.8%

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

No news available

Valuation

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

4.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DR3 (€30.4) is trading below our estimate of fair value (€31.72)

Significantly Below Fair Value: DR3 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: DR3 is good value based on its PE Ratio (28x) compared to the XE Multiline Retail industry average (28.2x).

PE vs Market: DR3 is poor value based on its PE Ratio (28x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: DR3 is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: DR3 is overvalued based on its PB Ratio (1471.3x) compared to the XE Multiline Retail industry average (3x).


Next Steps

Future Growth

How is Dollarama forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

10.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DR3's forecast earnings growth (10.8% per year) is above the savings rate (0.2%).

Earnings vs Market: DR3's earnings (10.8% per year) are forecast to grow slower than the German market (23.4% per year).

High Growth Earnings: DR3's earnings are forecast to grow, but not significantly.

Revenue vs Market: DR3's revenue (6.8% per year) is forecast to grow faster than the German market (5.9% per year).

High Growth Revenue: DR3's revenue (6.8% 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 DR3's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Dollarama performed over the past 5 years?

10.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DR3 has high quality earnings.

Growing Profit Margin: DR3's current net profit margins (14.4%) are lower than last year (15.1%).


Past Earnings Growth Analysis

Earnings Trend: DR3's earnings have grown by 10.6% per year over the past 5 years.

Accelerating Growth: DR3's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DR3 had negative earnings growth (-0.06%) over the past year, making it difficult to compare to the Multiline Retail industry average (3.1%).


Return on Equity

High ROE: Whilst DR3's Return on Equity (5289.39%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Dollarama's financial position?


Financial Position Analysis

Short Term Liabilities: DR3's short term assets (CA$1.2B) exceed its short term liabilities (CA$1.2B).

Long Term Liabilities: DR3's short term assets (CA$1.2B) do not cover its long term liabilities (CA$3.0B).


Debt to Equity History and Analysis

Debt Level: DR3's debt to equity ratio (21736.2%) is considered high.

Reducing Debt: DR3's debt to equity ratio has increased from 92.7% to 21736.2% over the past 5 years.

Debt Coverage: DR3's debt is well covered by operating cash flow (36.6%).

Interest Coverage: DR3's interest payments on its debt are well covered by EBIT (8.2x coverage).


Balance Sheet


Next Steps

Dividend

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

0.36%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DR3's dividend (0.36%) isn’t notable compared to the bottom 25% of dividend payers in the German market (1.25%).

High Dividend: DR3's dividend (0.36%) is low compared to the top 25% of dividend payers in the German market (3.83%).


Stability and Growth of Payments

Stable Dividend: DR3 is not paying a notable dividend for the German market, therefore no need to check if payments are stable.

Growing Dividend: DR3 is not paying a notable dividend for the German market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: DR3 is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of DR3's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

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

8.3yrs

Average management tenure


CEO

Neil Rossy (50 yo)

4.25yrs

Tenure

CA$3,797,786

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 ($USD2.84M) is below average for companies of similar size in the German market ($USD5.26M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Neil Rossy
CEO, President & Director4.25yrsCA$3.80m0.83%
CA$ 79.7m
Michael Ross
Chief Financial Officer10.33yrsCA$1.35m0.00045%
CA$ 43.3k
Johanne Choinière
Chief Operating Officer6.25yrsCA$1.41m0.021%
CA$ 2.0m
Geoffrey Robillard
Senior Vice President of Import Division16.58yrsCA$2.51m0.39%
CA$ 37.1m
Laurence Rossy
Chairman Emeritus2.17yrsCA$689.62k1.65%
CA$ 158.9m
Josée Kouri
VP of Legal Affairs & Corporate Secretaryno datano datano data
Nicolas Hien
Senior Vice President of Project Management & Systems3.58yrsno datano data
Jean-Philippe Durivage-Lachance
VP & Treasurerno datano datano data

8.3yrs

Average Tenure

60.5yo

Average Age

Experienced Management: DR3's management team is seasoned and experienced (8.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Neil Rossy
CEO, President & Director4.25yrsCA$3.80m0.83%
CA$ 79.7m
Laurence Rossy
Chairman Emeritus2.17yrsCA$689.62k1.65%
CA$ 158.9m
Joshua Bekenstein
Independent Director16.58yrsCA$149.00k0.0048%
CA$ 463.3k
Kristin Mugford
Independent Director2.42yrsCA$143.50kno data
Stephen Gunn
Independent Chairman of the Board2.17yrsCA$250.00k0.030%
CA$ 2.8m
Richard Roy
Independent Director7.83yrsCA$155.00k0.0039%
CA$ 371.1k
Elisa Garcia C.
Independent Director5.5yrsCA$140.00kno data
Nicholas Nomicos
Independent Director16.58yrsCA$163.50kno data
Gregory David
Non-Executive Director16.58yrsCA$134.00kno data
John Thomas
Independent Director9.42yrsCA$142.50k0.010%
CA$ 964.2k

8.6yrs

Average Tenure

61.5yo

Average Age

Experienced Board: DR3's board of directors are considered experienced (8.6 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: DR3 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: DR3
  • Exchange: DB
  • Founded: 1992
  • Industry: General Merchandise Stores
  • Sector: Retail
  • Market Cap: CA$15.231b
  • Listing Market Cap: CA$9.613b
  • Shares outstanding: 310.97m
  • Website: https://www.dollarama.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DOLTSX (The Toronto Stock Exchange)YesCommon SharesCACADOct 2009
DR3DB (Deutsche Boerse AG)YesCommon SharesDEEUROct 2009
DLMA.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDOct 2009

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 February 2, 2020, it operat ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/02 21:46
End of Day Share Price2020/07/31 00:00
Earnings2020/05/03
Annual Earnings2020/02/02


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.