DB:D4K

Stock Analysis Report

Executive Summary

DWS Limited provides information technology services to corporations and government bodies in Australia.

Rewards

Trading at 10.2% below its fair value

Risk Analysis

Earnings have declined by -1.81% per year over past 5 years

Has a high level of debt

Dividend of 5.56% is not well covered by earnings

Profit margins (5.3%) are lower than last year (8.5%)

+ 1 more risk


Snowflake Analysis

Good value with mediocre balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: D4K has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

D4K

-4.8%

DE IT

0.1%

DE Market


1 Year Return

-10.6%

D4K

29.0%

DE IT

14.1%

DE Market

Return vs Industry: D4K underperformed the German IT industry which returned 29% over the past year.

Return vs Market: D4K underperformed the German Market which returned 14.1% over the past year.


Shareholder returns

D4KIndustryMarket
7 Day0%-4.8%0.1%
30 Day-0.8%5.6%0.2%
90 Day3.2%16.1%3.3%
1 Year-3.8%-10.6%29.8%29.0%17.6%14.1%
3 Yearn/a149.8%143.0%14.8%4.8%
5 Yearn/a231.3%217.8%22.2%5.4%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

10.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: D4K (€0.65) is trading below our estimate of fair value (€0.72)

Significantly Below Fair Value: D4K is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: D4K is good value based on its PE Ratio (16.3x) compared to the IT industry average (33.3x).

PE vs Market: D4K is good value based on its PE Ratio (16.3x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate D4K's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: D4K is good value based on its PB Ratio (2x) compared to the DE IT industry average (4.7x).


Next Steps

Future Growth

How is DWS forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

23.1%

Forecasted Software industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as DWS has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has DWS performed over the past 5 years?

-1.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: D4K has high quality earnings.

Growing Profit Margin: D4K's current net profit margins (5.3%) are lower than last year (8.5%).


Past Earnings Growth Analysis

Earnings Trend: D4K's earnings have declined by -1.8% per year over the past 5 years.

Accelerating Growth: D4K's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: D4K had negative earnings growth (-29.8%) over the past year, making it difficult to compare to the IT industry average (16.1%).


Return on Equity

High ROE: D4K's Return on Equity (12.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is DWS's financial position?


Financial Position Analysis

Short Term Liabilities: D4K's short term assets (A$33.8M) exceed its short term liabilities (A$25.4M).

Long Term Liabilities: D4K's short term assets (A$33.8M) do not cover its long term liabilities (A$50.6M).


Debt to Equity History and Analysis

Debt Level: D4K's debt to equity ratio (63.9%) is considered high.

Reducing Debt: D4K's debt to equity ratio has increased from 0.09% to 63.9% over the past 5 years.

Debt Coverage: D4K's debt is well covered by operating cash flow (35.7%).

Interest Coverage: D4K's interest payments on its debt are well covered by EBIT (6.3x coverage).


Balance Sheet

Inventory Level: D4K has a low level of unsold assets or inventory.

Debt Coverage by Assets: D4K's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

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

5.61%

Current Dividend Yield


Upcoming Dividend Payment

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


Dividend Yield vs Market

company5.6%marketbottom25%1.3%markettop25%3.6%industryaverage0.5%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: D4K's dividend (5.56%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: D4K's dividend (5.56%) is in the top 25% of dividend payers in the German market (3.57%)


Stability and Growth of Payments

Stable Dividend: D4K's dividend payments have been volatile in the past 10 years.

Growing Dividend: D4K's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (105.5%), D4K's dividend payments are not 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?

4.2yrs

Average board tenure


CEO

Danny Wallis (56yo)

4.8yrs

Tenure

AU$300,000

Compensation

Mr. Danny Benedict Wallis, BCS, founded DWS Limited in 1992 and has been its Chief Executive Officer and Managing Director since April 30, 2015. Mr. Wallis served as its Chief Executive Officer and Managin ...


CEO Compensation Analysis

Compensation vs Market: Danny's total compensation ($USD201.55K) is below average for companies of similar size in the German market ($USD413.42K).

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


Board Members

NamePositionTenureCompensationOwnership
Danny Wallis
Founder4.8yrsAU$300.00k42.71% A$37.3m
Gary Ebeyan
Independent Non-Executive Director9.3yrsAU$90.00k0.012% A$10.7k
Martin Ralston
Non-Executive Chairman4.2yrsAU$145.59k0.014% A$11.9k
Hayden Kelly
Non-Executive Director4.3yrsAU$90.00k0.015% A$13.2k
Selina Lightfoot
Independent Non-Executive Director3.2yrsAU$90.00k0.010% A$8.7k
Danny Gorog
Non Executive Director0.6yrsno data0.0076% A$6.6k

4.2yrs

Average Tenure

Experienced Board: D4K's board of directors are considered experienced (4.2 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.


Ownership Breakdown

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


Top Shareholders

Company Information

DWS Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: DWS Limited
  • Ticker: D4K
  • Exchange: DB
  • Founded: 1991
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: AU$141.060m
  • Listing Market Cap: AU$87.231m
  • Shares outstanding: 131.83m
  • Website: https://www.dws.com.au

Number of Employees


Location

  • DWS Limited
  • 500 Collins Street
  • Level 4
  • Melbourne
  • Victoria
  • 3000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DWSASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJun 2006
DWSCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJun 2006
D4KDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2006

Biography

DWS Limited provides information technology services to corporations and government bodies in Australia. The company offers a suite of integrated solutions, including IT consulting services, such as IT strategy and architecture advice, program and project management, business and technical analysis, custom application development, systems integration and solution testing, and robotics processing automation; and digital solutions incorporating data automation and capture systems, and customer-led, digital strategy, and design services. It also provides business intelligence services comprising advanced analytics, as well as power BI and data warehouse as a service; sourcing and productivity services; and managed application services using a mix of offshore, on-site, off-site, and high-security models depending on client requirements. The company serves government and defense, banking and finance, utilities, transport, healthcare, FMCG and retail, and other sectors. DWS Limited was incorporated in 1991 and is headquartered in Melbourne, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 00:11
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


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.