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 acceptable track record.

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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.1%

DPLM

0.2%

GB Trade Distributors

0.07%

GB Market


1 Year Return

44.5%

DPLM

15.8%

GB Trade Distributors

-15.4%

GB Market

Return vs Industry: DPLM exceeded the UK Trade Distributors industry which returned 15.8% over the past year.

Return vs Market: DPLM exceeded the UK Market which returned -15.4% over the past year.


Shareholder returns

DPLMIndustryMarket
7 Day1.1%0.2%0.07%
30 Day5.9%8.5%2.2%
90 Day27.3%13.6%-2.1%
1 Year46.1%44.5%16.8%15.8%-12.1%-15.4%
3 Year124.8%113.7%33.4%24.0%-8.4%-19.7%
5 Year295.5%258.8%89.4%67.8%16.4%-9.7%

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?

41.29x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DPLM (£23.02) is trading above our estimate of fair value (£10.99)

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 (41.3x) compared to the GB Trade Distributors industry average (19.4x).

PE vs Market: DPLM is poor value based on its PE Ratio (41.3x) compared to the UK market (18.3x).


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 (8.1x) compared to the GB Trade Distributors industry average (1.4x).


Next Steps

Future Growth

How is Diploma forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

15.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DPLM's forecast earnings growth (15.7% per year) is above the savings rate (1.2%).

Earnings vs Market: DPLM's earnings (15.7% per year) are forecast to grow slower than the UK market (24.1% per year).

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

Revenue vs Market: DPLM's revenue (5.8% per year) is forecast to grow slower than the UK market (6% per year).

High Growth Revenue: DPLM's revenue (5.8% 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 (21.2%)


Next Steps

Past Performance

How has Diploma performed over the past 5 years?

12.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DPLM has high quality earnings.

Growing Profit Margin: DPLM's current net profit margins (11.1%) are lower than last year (11.3%).


Past Earnings Growth Analysis

Earnings Trend: DPLM's earnings have grown by 12.9% per year over the past 5 years.

Accelerating Growth: DPLM's earnings growth over the past year (9.3%) is below its 5-year average (12.9% per year).

Earnings vs Industry: DPLM earnings growth over the past year (9.3%) exceeded the Trade Distributors industry -14.9%.


Return on Equity

High ROE: DPLM's Return on Equity (19.6%) is considered low.


Next Steps

Financial Health

How is Diploma's financial position?


Financial Position Analysis

Short Term Liabilities: DPLM's short term assets (£232.7M) exceed its short term liabilities (£114.8M).

Long Term Liabilities: DPLM's short term assets (£232.7M) exceed its long term liabilities (£113.6M).


Debt to Equity History and Analysis

Debt Level: DPLM's debt to equity ratio (17.2%) is considered satisfactory.

Reducing Debt: DPLM's debt to equity ratio has reduced from 17.4% to 17.2% over the past 5 years.

Debt Coverage: DPLM's debt is well covered by operating cash flow (141.8%).

Interest Coverage: DPLM's interest payments on its debt are well covered by EBIT (45.3x coverage).


Balance Sheet


Next Steps

Dividend

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

1.30%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DPLM's dividend (1.3%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.81%).

High Dividend: DPLM's dividend (1.3%) is low compared to the top 25% of dividend payers in the UK market (5.24%).


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 reasonably low payout ratio (36.8%), DPLM's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DPLM's dividends in 3 years are forecast to be well covered by earnings (46.4% payout ratio).


Next Steps

Management

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

1.7yrs

Average management tenure


CEO

Johnny Thomson (48 yo)

1.67yrs

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 ($USD1.76M) is about average for companies of similar size in the UK market ($USD2.04M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Jonathan Thomson
CEO & Director1.67yrsUK£1.35m0.024%
£ 694.5k
Barbara Gibbes
CFO & Director0.33yrno datano data
Neil Yazdani
Group Financial Controller1.75yrsno datano data
John Morrison
Group Company Secretary0.42yrno datano data
Stuart Bell
Finance Director of International Seals2yrsno datano data

1.7yrs

Average Tenure

Experienced Management: DPLM's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Jonathan Thomson
CEO & Director1.67yrsUK£1.35m0.024%
£ 694.5k
Barbara Gibbes
CFO & Director0.33yrno datano data
Charles Packshaw
Senior Independent Non-Executive Director5.67yrsUK£62.00k0.0012%
£ 34.4k
Andrew Smith
Independent Non-Executive Director5.67yrsUK£64.00k0.0044%
£ 126.7k
Anne Thorburn
Independent Non-Executive Director5.08yrsUK£64.00k0.0024%
£ 69.1k
John Nicholas
Non-Executive Chairman5.75yrsUK£304.00k0.0056%
£ 161.1k
Geraldine Huse
Non-Executive Director0.75yrno datano data

5.1yrs

Average Tenure

60yo

Average Age

Experienced Board: DPLM's board of directors are considered experienced (5.1 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.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 10%.


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£2.866b
  • Shares outstanding: 124.51m
  • 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 Analysis2020/10/24 21:35
End of Day Share Price2020/10/23 00:00
Earnings2020/03/31
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.