This stock has been left behind in the most recent rallies on Wall Street. That is unusual when you sit down and parse out the revenue, earnings and profits. Check out what Dillards has to offer your portfolio. This is a real hidden gem with a lot of long term potential.
We determine the current worth of Dillards using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Dillards based exclusively on its
fundamental and basic
technical indicators. By analyzing Dillards's
financials, quarterly and monthly indicators, and related drivers such as
dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Dillards's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Dillards. We calculate exposure to Dillards's
market risk, different
technical and
fundamental indicators, relevant financial multiples and ratios, and then
comparing them to Dillards's related companies.
Dillards Investment Alerts
Dillards investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Dillards performance across your portfolios.Please check all
investment alerts for Dillards
Dillards Valuation Ratios as Compared to Competition
Our valuation model uses many indicators to compare Dillards value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Dillards competition to find
correlations between indicators driving the intrinsic value of Dillards.
Dillards Gross Profit
Dillards Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Dillards previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Dillards Gross Profit growth over the last 10 years. Please check Dillards'
gross profit and other
fundamental indicators for more details.
Is Dillards valued wisely by the market?
You can tell a lot about a car just by looking under the hood. Well, that may have been the case long before the modern cars of today when you consider how the engine appears to be buried under some huge cover. Now, you really have to do some digging around to get to see what is really going on.
Dillard’s is almost like a car in that regards. You know it is a retailer. We have all heard of it, even if we have not had the fortune of walking into one of these stores. After doing a healthy sifting around this company popped up in my screener. I had seen it before but passed. Now, after digging around, looking beyond the hood, if you will, I think I have found something very enticing.
Here is the company’s basic financials from the past several years to include revenue, operating profits and earnings per share.
2011: $6,399.80 $473.50 $8.67
2012: $6,751.60 $550.60 $6.98
2013: $6,691.80 $553.70 $7.10
2014: $6,780.10 $569.20 $7.79
2015: $6,754.50 $466.70 $6.91
Honestly, I almost fell asleep when I saw these numbers. Consistent. Steady. Unremarkable.
Mind you, there is nothing wrong with that. In fact, I would much prefer that kind of company when it comes to adding something into my portfolio. But, before I add something into my portfolio, and after I have seen the numbers, I want to know what I am about to pay for this company. That is when things went from boring to really interesting.
Dillard’s is trading at $65 per share. Last year’s earnings per share came in at the above mentioned $6.91. That means the company is trading at less than 10-times earnings. So, what I am seeing si the potential to get a consistently earning company with consistent earnings - a small amount of long term debt - at a price that gets me about 10% return on an annual basis. Sign me up.
Mind you, there must be some kind of catch. I could not readily find one. In fact, I started to consider the other side of “catch” and look at the fundamentals. For instance, retail sales numbers were released the past few days for the United States. There was an improvement in the year-over-year numbers from 3.8% to 4.1%. What is happening is that consumers are earning more and more, and I expect that trend to improve significantly over the next several years. And, with those improved earnings, these same consumers are spending more and more at shopping malls and department stores. The economic position for Dillards is looking brighter, and that brighter analysis is coming from a position of doing very well to begin with.
As I said, I sort of like boring and predictable when it comes to adding a company into my portfolio. I will pass on exhilarating. I think Dillards qualifies as boring and predictable. Predictably, the company can print profits and earnings with the same speed at which they are doing so. This makes this company more like an energy company in a lot of ways. From here, however, I also see potential for growth with the expansion of the economy. That growth potential will translate into revenue growth and earnings growth. That will propel the company’s stock forward. The current less-than 10-times earnings ratio is low and I expect that to turn significantly. In fact, if the company were to be merely average, trading at 15-times earnings, this stock would be trading above $100 per share, a nearly 50% return.
I am going shopping. Dillard’s has made my list of things to buy.
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David Taylor is a Senior Member of Macroaxis Editorial Board - Sector Analysis. David is a professional writer who writes for multiple investment news outlets. His primary focus is dynamic movements in financial markets and effects of economic volatility on North American industries and sectors. David has many years of experience in financial service industry including working with major banks as a FX trader. In his free time, he does a lot of outdoors type activities including rock climbing, mountain biking, hiking, mountaineering and kayaking in the summer, and snowboarding in the winter.
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