NasdaqGS:DXPE

Stock Analysis Report

Executive Summary

DXP Enterprises, Inc. engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services to energy and industrial customers in the United States.

Rewards

Trading at 42.3% below its fair value

Earnings are forecast to grow 7.87% per year

Earnings grew by 44.5% over the past year

Risk Analysis

Debt is not well covered by operating cash flow



Snowflake Analysis

Good value with proven track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

1.6%

DXPE

0.7%

US Trade Distributors

1.7%

US Market


1 Year Return

19.7%

DXPE

17.9%

US Trade Distributors

23.6%

US Market

Return vs Industry: DXPE exceeded the US Trade Distributors industry which returned 17.9% over the past year.

Return vs Market: DXPE underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

DXPEIndustryMarket
7 Day1.6%0.7%1.7%
30 Day-3.6%-0.6%3.5%
90 Day17.9%8.2%11.7%
1 Year19.7%19.7%19.8%17.9%26.2%23.6%
3 Year2.5%2.5%29.3%23.7%53.2%43.3%
5 Year-1.1%-1.1%50.1%39.0%75.5%56.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

41.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DXPE ($38.54) is trading below our estimate of fair value ($66.79)

Significantly Below Fair Value: DXPE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: DXPE is good value based on its PE Ratio (15.1x) compared to the Trade Distributors industry average (17x).

PE vs Market: DXPE is good value based on its PE Ratio (15.1x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: DXPE is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: DXPE is overvalued based on its PB Ratio (2x) compared to the US Trade Distributors industry average (1.7x).


Next Steps

Future Growth

How is DXP Enterprises forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

7.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DXPE's forecast earnings growth (7.9% per year) is above the savings rate (1.7%).

Earnings vs Market: DXPE's earnings (7.9% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: DXPE's revenue (1.5% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: DXPE's revenue (1.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DXPE's Return on Equity is forecast to be low in 3 years time (12.8%).


Next Steps

Past Performance

How has DXP Enterprises performed over the past 5 years?

51.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DXPE has high quality earnings.

Growing Profit Margin: DXPE's current net profit margins (3.5%) are higher than last year (2.7%).


Past Earnings Growth Analysis

Earnings Trend: DXPE's earnings have grown significantly by 51.8% per year over the past 5 years.

Accelerating Growth: DXPE's earnings growth over the past year (44.5%) is below its 5-year average (51.8% per year).

Earnings vs Industry: DXPE earnings growth over the past year (44.5%) exceeded the Trade Distributors industry -7.3%.


Return on Equity

High ROE: DXPE's Return on Equity (13.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is DXP Enterprises's financial position?


Financial Position Analysis

Short Term Liabilities: DXPE's short term assets ($412.3M) exceed its short term liabilities ($152.0M).

Long Term Liabilities: DXPE's short term assets ($412.3M) exceed its long term liabilities ($297.2M).


Debt to Equity History and Analysis

Debt Level: DXPE's debt to equity ratio (69.5%) is considered high.

Reducing Debt: DXPE's debt to equity ratio has reduced from 133.1% to 69.5% over the past 5 years.

Debt Coverage: DXPE's debt is not well covered by operating cash flow (14.1%).

Interest Coverage: DXPE's interest payments on its debt are well covered by EBIT (4x coverage).


Balance Sheet

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

Debt Coverage by Assets: DXPE's debt is covered by short term assets (assets are 1.7x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.6%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate DXPE's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate DXPE's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if DXPE's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if DXPE's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

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


Next Steps

Management

What is the CEO of DXP Enterprises's salary, the management and board of directors tenure and is there insider trading?

2.6yrs

Average management tenure


CEO

David Little (67yo)

24yrs

Tenure

US$2,065,014

Compensation

Mr. David R. Little serves as the President of Best Equipment Service & Sales Company, LLC. Mr. Little has been the Chairman, Chief Executive Officer and President at DXP Enterprises, Inc. since 1996. Mr.  ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD2.07M) is about average for companies of similar size in the US market ($USD2.53M).

Compensation vs Earnings: David's compensation has increased by more than 20% in the past year.


Management Age and Tenure

2.6yrs

Average Tenure

50yo

Average Age

Experienced Management: DXPE's management team is considered experienced (2.6 years average tenure).


Board Age and Tenure

21.3yrs

Average Tenure

68yo

Average Age

Experienced Board: DXPE's board of directors are seasoned and experienced ( 21.3 years average tenure).


Insider Trading

Insider Buying: DXPE insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$56,92202 Dec 19
Christopher Gregory
EntityIndividual
Role
Chief Information Officer
Senior VP of Information Technology & Chief Information Officer
Shares1,432
Max PriceUS$39.75
SellUS$606,14221 Mar 19
Kent Yee
EntityIndividual
Role
Chief Financial Officer
Senior VP of Finance
Shares14,960
Max PriceUS$41.39

Ownership Breakdown

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


Management Team

  • David Little (67yo)

    Chairman of the Board

    • Tenure: 24yrs
    • Compensation: US$2.07m
  • David Vinson (68yo)

    Senior Vice President of Innovative Pumping Solutions

    • Tenure: 14yrs
    • Compensation: US$455.42k
  • John Jeffery (51yo)

    Senior Vice President of Supply Chain Services

    • Compensation: US$737.76k
  • Wick Norbert

    VP & Controller

    • Kent Yee (44yo)

      Senior VP of Finance

      • Tenure: 2.6yrs
      • Compensation: US$731.83k
    • Valerie Mosley (59yo)

      Chief Executive Officer of Valmo Ventures

      • Todd Hamlin (47yo)

        Senior Vice President of Sales

        • Tenure: 2.6yrs
        • Compensation: US$734.31k
      • Chris Gregory (43yo)

        Senior VP of Information Technology & Chief Information Officer

        • Tenure: 1.8yrs
        • Compensation: US$1.40m
      • Gene Padgett (49yo)

        Senior VP & Chief Accounting Officer

        • Tenure: 1.7yrs

      Board Members

      • Tim Halter (52yo)

        Independent Director

        • Tenure: 18.5yrs
        • Compensation: US$86.90k
      • David Little (67yo)

        Chairman of the Board

        • Tenure: 24yrs
        • Compensation: US$2.07m
      • Cletus Davis (89yo)

        Independent Director

        • Tenure: 24yrs
        • Compensation: US$86.90k
      • David Patton (69yo)

        Independent Director

        • Tenure: 3.5yrs
        • Compensation: US$86.90k

      Company Information

      DXP Enterprises, Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: DXP Enterprises, Inc.
      • Ticker: DXPE
      • Exchange: NasdaqGS
      • Founded: 1908
      • Industry: Trading Companies and Distributors
      • Sector: Capital Goods
      • Market Cap: US$690.928m
      • Shares outstanding: 17.60m
      • Website: https://www.dxpe.com

      Number of Employees


      Location

      • DXP Enterprises, Inc.
      • 7272 Pinemont
      • Houston
      • Texas
      • 77040
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      DXPENasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDOct 1994
      DX7DB (Deutsche Boerse AG)YesCommon StockDEEUROct 1994

      Biography

      DXP Enterprises, Inc. engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services to energy and industrial customers in the United States. It operates in three segments: Service Centers, Supply Chain Services, and Innovative Pumping Solutions. The Service Centers segment offers MRO products, equipment, and integrated services, including technical expertise and logistics services. It offers rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, and safety products and services; and field safety supervision, in-house and field repair, and predictive maintenance services. This segment serves the oil and gas, food and beverage, petrochemical, transportation, other general industry, mining, construction, chemical, municipal, agriculture, and pulp and paper industries. The Supply Chain Services segment manages procurement and inventory management solutions; and offers inventory optimization and management, store room management, transaction consolidation and control, vendor oversight and procurement cost optimization, productivity improvement, and customized reporting services. This segment’s programs include SmartAgreement, a procurement solution for various MRO categories; SmartBuy, an on-site or centralized MRO procurement solution; SmartSource, an on-site procurement and storeroom management solution; SmartStore, an e-catalog solution; SmartVend, an industrial dispensing solution; and SmartServ, an integrated service pump solution. The Innovative Pumping Solutions segment provides pump packages comprising diesel and electric driven firewater, pipeline booster, potable water, pigging, lease automatic custody transfer charge unit, chemical injection wash down unit, seawater lift, jockey, condensate, cooling water, and seawater/produced water injection pump packages. The company was founded in 1908 and is based in Houston, Texas. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/19 23:34
      End of Day Share Price2020/01/17 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      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.