LSE:DPLM

Stock Analysis Report

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Executive Summary

Diploma PLC, together with its subsidiaries, supplies specialized technical products and services in the United Kingdom, rest of Europe, North America, and internationally. More Details


Snowflake Analysis

Flawless balance sheet with reasonable growth potential.

Share Price & News

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


Latest Share Price and Events

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

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


Market Performance


7 Day Return

-0.09%

DPLM

-4.2%

GB Trade Distributors

-2.4%

GB Market


1 Year Return

18.9%

DPLM

17.7%

GB Trade Distributors

-8.0%

GB Market

Return vs Industry: DPLM exceeded the UK Trade Distributors industry which returned 17.7% over the past year.

Return vs Market: DPLM exceeded the UK Market which returned -8% over the past year.


Shareholder returns

DPLMIndustryMarket
7 Day-0.09%-4.2%-2.4%
30 Day5.8%-1.5%-0.5%
90 Day4.7%16.0%18.1%
1 Year20.6%18.9%19.4%17.7%-4.4%-8.0%
3 Year113.2%102.6%48.4%37.1%3.7%-9.0%
5 Year296.9%261.2%117.5%92.2%43.1%15.6%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

53.59x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DPLM (£23.3) is trading above our estimate of fair value (£15.12)

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


Price To Earnings Ratio

PE vs Industry: DPLM is poor value based on its PE Ratio (53.6x) compared to the GB Trade Distributors industry average (24.5x).

PE vs Market: DPLM is poor value based on its PE Ratio (53.6x) compared to the UK market (22.9x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: DPLM is overvalued based on its PB Ratio (5.5x) compared to the GB Trade Distributors industry average (1.6x).


Next Steps

Future Growth

How is Diploma forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

20.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DPLM's forecast earnings growth (20.8% per year) is above the savings rate (1%).

Earnings vs Market: DPLM's earnings (20.8% per year) are forecast to grow slower than the UK market (24% per year).

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

Revenue vs Market: DPLM's revenue (11.6% per year) is forecast to grow faster than the UK market (6.4% per year).

High Growth Revenue: DPLM's revenue (11.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DPLM's Return on Equity is forecast to be very high in 3 years time (41%).


Next Steps

Past Performance

How has Diploma performed over the past 5 years?

10.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DPLM has high quality earnings.

Growing Profit Margin: DPLM's current net profit margins (9.2%) are lower than last year (11.4%).


Past Earnings Growth Analysis

Earnings Trend: DPLM's earnings have grown by 10.8% per year over the past 5 years.

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

Earnings vs Industry: DPLM had negative earnings growth (-20.4%) over the past year, making it difficult to compare to the Trade Distributors industry average (-22.8%).


Return on Equity

High ROE: DPLM's Return on Equity (9.4%) is considered low.


Next Steps

Financial Health

How is Diploma's financial position?


Financial Position Analysis

Short Term Liabilities: DPLM's short term assets (£385.2M) exceed its short term liabilities (£110.5M).

Long Term Liabilities: DPLM's short term assets (£385.2M) exceed its long term liabilities (£53.4M).


Debt to Equity History and Analysis

Debt Level: DPLM is debt free.

Reducing Debt: DPLM has no debt compared to 5 years ago when its debt to equity ratio was 10.5%.

Debt Coverage: DPLM has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: DPLM has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

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

1.29%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DPLM's dividend (1.29%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.52%).

High Dividend: DPLM's dividend (1.29%) is low compared to the top 25% of dividend payers in the UK market (4.59%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (69%), DPLM's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DPLM's dividends in 3 years are forecast to be well covered by earnings (44.5% payout ratio).


Next Steps

Management

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

1.9yrs

Average management tenure


CEO

Johnny Thomson (48 yo)

1.92yrs

Tenure

UK£999,000

Compensation

Mr. Jonathan Thomson, also known as Johnny, has been Chief Executive Officer and Director at Diploma PLC since February 25, 2019. He served as Group Finance Director at Compass Group International B.V. unt...


CEO Compensation Analysis

Compensation vs Market: Johnny's total compensation ($USD1.37M) is below average for companies of similar size in the UK market ($USD1.99M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Jonathan Thomson
CEO & Director1.92yrsUK£999.00k0.030%
£ 867.8k
Barbara Gibbes
CFO & Director0.58yrUK£229.42k0.0013%
£ 38.6k
Neil Yazdani
Group Financial Controller2yrsno datano data
John Morrison
Group Company Secretary0.67yrno datano data
Stuart Bell
Finance Director of International Seals2.25yrsno datano data

1.9yrs

Average Tenure

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


Board Members

NamePositionTenureCompensationOwnership
Jonathan Thomson
CEO & Director1.92yrsUK£999.00k0.030%
£ 867.8k
Barbara Gibbes
CFO & Director0.58yrUK£229.42k0.0013%
£ 38.6k
Andrew Smith
Independent Non-Executive Director5.92yrsUK£62.00k0.0044%
£ 128.2k
Anne Thorburn
Senior Independent Directorno dataUK£62.00k0.0024%
£ 69.9k
John Nicholas
Non-Executive Chairman6yrsUK£146.00k0.0056%
£ 163.0k
Geraldine Huse
Independent Non-Executive Director1yrUK£35.00kno data

1.9yrs

Average Tenure

59.5yo

Average Age

Experienced Board: DPLM's board of directors are not considered experienced ( 1.9 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: DPLM insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 9.9%.


Top Shareholders

Company Information

Diploma PLC's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Diploma PLC
  • Ticker: DPLM
  • Exchange: LSE
  • Founded: 1999
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Market Cap: UK£2.900b
  • Shares outstanding: 124.44m
  • Website: https://www.diplomaplc.com

Number of Employees


Location

  • Diploma PLC
  • 12 Charterhouse Square
  • London
  • Greater London
  • EC1M 6AX
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DPLMLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
DPLMLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
DP9DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992

Biography

Diploma PLC, together with its subsidiaries, supplies specialized technical products and services in the United Kingdom, rest of Europe, North America, and internationally. It operates through three segmen...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/28 02:17
End of Day Share Price2021/01/27 00:00
Earnings2020/09/30
Annual Earnings2020/09/30


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.