LSE:DPLM

Stock Analysis Report

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.


Snowflake Analysis

Excellent balance sheet with solid track record and pays a dividend.

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


Market Performance


7 Day Return

-11.0%

DPLM

-8.8%

GB Trade Distributors

-11.3%

GB Market


1 Year Return

36.7%

DPLM

5.3%

GB Trade Distributors

-5.0%

GB Market

Return vs Industry: DPLM exceeded the UK Trade Distributors industry which returned 9.5% over the past year.

Return vs Market: DPLM exceeded the UK Market which returned -1.3% over the past year.


Shareholder returns

DPLMIndustryMarket
7 Day-11.0%-8.8%-11.3%
30 Day-4.6%-4.6%-11.5%
90 Day2.1%-1.7%-8.4%
1 Year39.0%36.7%9.6%5.3%0.1%-5.0%
3 Year86.5%76.2%33.6%21.4%4.5%-8.8%
5 Year163.6%137.4%60.1%38.8%20.3%-7.1%

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?

34.37x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DPLM (£18.8) is trading above our estimate of fair value (£14.13)

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 (34.4x) compared to the Trade Distributors industry average (15.8x).

PE vs Market: DPLM is poor value based on its PE Ratio (34.4x) compared to the UK market (16.8x).


Price to Earnings Growth Ratio

PEG Ratio: DPLM is poor value based on its PEG Ratio (4.4x)


Price to Book Ratio

PB vs Industry: DPLM is overvalued based on its PB Ratio (6.6x) compared to the GB Trade Distributors industry average (1.9x).


Next Steps

Future Growth

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

7.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DPLM's forecast earnings growth (7.9% per year) is above the savings rate (0.5%).

Earnings vs Market: DPLM's earnings (7.9% per year) are forecast to grow slower than the UK market (13.2% per year).

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

Revenue vs Market: DPLM's revenue (5% per year) is forecast to grow faster than the UK market (3.8% per year).

High Growth Revenue: DPLM's revenue (5% 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 high in 3 years time (21%)


Next Steps

Past Performance

How has Diploma performed over the past 5 years?

12.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DPLM has high quality earnings.

Growing Profit Margin: DPLM's current net profit margins (11.4%) are higher than last year (11.1%).


Past Earnings Growth Analysis

Earnings Trend: DPLM's earnings have grown by 12.2% per year over the past 5 years.

Accelerating Growth: DPLM's earnings growth over the past year (15.1%) exceeds its 5-year average (12.2% per year).

Earnings vs Industry: DPLM earnings growth over the past year (15.1%) exceeded the Trade Distributors industry 6.2%.


Return on Equity

High ROE: DPLM's Return on Equity (19.2%) is considered low.


Next Steps

Financial Health

How is Diploma's financial position?


Financial Position Analysis

Short Term Liabilities: DPLM's short term assets (£220.7M) exceed its short term liabilities (£107.9M).

Long Term Liabilities: DPLM's short term assets (£220.7M) exceed its long term liabilities (£69.2M).


Debt to Equity History and Analysis

Debt Level: DPLM's debt to equity ratio (13%) is considered satisfactory.

Reducing Debt: DPLM's debt to equity ratio has increased from 0.2% to 13% over the past 5 years.

Debt Coverage: DPLM's debt is well covered by operating cash flow (167%).

Interest Coverage: DPLM's interest payments on its debt are well covered by EBIT (167.8x coverage).


Balance Sheet

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

Debt Coverage by Assets: DPLM's debt is covered by short term assets (assets are 5.2x debt).


Next Steps

Dividend

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

1.54%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DPLM's dividend (1.54%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.94%).

High Dividend: DPLM's dividend (1.54%) is low compared to the top 25% of dividend payers in the UK market (5.4%).


Stability and Growth of Payments

Stable Dividend: DPLM's dividends per share have been stable 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 (53%), 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 (45.6% payout ratio).


Next Steps

Management

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

1.3yrs

Average management tenure


CEO

Johnny Thomson (47yo)

1yrs

Tenure

UK£1,347,134

Compensation

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


CEO Compensation Analysis

Compensation vs Market: Johnny's total compensation ($USD1.73M) is about average for companies of similar size in the UK market ($USD2.41M).

Compensation vs Earnings: Insufficient data to compare Johnny's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Jonathan Thomson
CEO & Director1yrsUK£1.35m0.027% £567.3k
Nigel Lingwood
Group Finance Director & Executive Director18.7yrsUK£1.61m0.088% £1.9m
Anthony Gallagher
Group Company Secretary7.4yrsno datano data
Neil Yazdani
Group Financial Controller1.1yrsno datano data
Stuart Bell
Finance Director of International Seals1.3yrsno datano data

1.3yrs

Average Tenure

Experienced Management: DPLM's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Jonathan Thomson
CEO & Director1yrsUK£1.35m0.027% £567.3k
Nigel Lingwood
Group Finance Director & Executive Director18.7yrsUK£1.61m0.088% £1.9m
Charles Packshaw
Senior Independent Non-Executive Director5yrsUK£62.00k0.0013% £28.3k
Andrew Smith
Independent Non-Executive Director5yrsUK£64.00k0.0049% £103.4k
Anne Thorburn
Independent Non-Executive Director4.4yrsUK£64.00k0.0027% £56.4k
John Nicholas
Non-Executive Chairman5.1yrsUK£304.00k0.0062% £131.5k
Geraldine Huse
Non-Executive Director0.08yrsno datano data

5.0yrs

Average Tenure

59.5yo

Average Age

Experienced Board: DPLM's board of directors are considered experienced (5 years average tenure).


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 not been meaningfully diluted in the past year.


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£2.128b
  • Shares outstanding: 113.19m
  • 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 segments: Life Sciences, Seals, and Controls. The Life Sciences sector supplies consumables and instruments for the diagnostic testing of blood, tissue, and other samples in hospital pathology and life sciences laboratories; electrosurgery equipment and consumables for use in hospital operating rooms; and medical devices, and related consumables and services to GI endoscopy suites in hospitals and private clinics. It also provides environmental analyzers and containment enclosures for potent powder handling; and equipment and services for the monitoring and control of environmental emissions, as well as gas detection devices. The Seals sector supplies a range of seals, gaskets, filters, cylinders, components, and kits used in heavy mobile machinery and specialized industrial equipment; and sealing products, custom moulded and machined parts, and hydraulic cylinder components to manufacturers of specialized industrial equipment. The Controls sector offers wiring, protective sleeving, connectors and harnessing products, aerospace-quality fasteners, customized assemblies, and cables and cable accessories for technical applications in aerospace and defense, motorsport, energy, medical, rail, and industrial industries; flexible braided products for screening, earthing and lightning protection, power shunt connectors, multi-core cables, cable markers, sleeving and trunking, and specialty fasteners; and fluid controllers, compressors, valves, temperature and pressure measurement devices, and specialized vending and liquid dispensing components for food retailing and transportation, catering equipment, coffee brewing, pure water, and water cooling systems in the food and beverage industry. Diploma PLC was incorporated in 1999 and is based in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/28 20:45
End of Day Share Price2020/02/28 00:00
Earnings2019/09/30
Annual Earnings2019/09/30


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.