DSV stock analysis: What we will go through here is what they do, finances, and see if we can identify any strengths, weaknesses, and what to look for in the future.
What does DSV do?
DSV is a Danish company specializing in logistics and transportation services. The company offers a wide range of solutions, including the transport of goods by air, sea, road, and rail, as well as warehouse and distribution services.
DSV focuses on delivering efficient and reliable logistics solutions for customers in various industries. The company also provides specialized services such as customs handling, project transport, and logistics consulting.
A bit about finances
Financially, 2023 is not the best year for DSV, but it's not very bad either. They are earning decent profits and distributing small dividends along with substantial share buybacks. They take an aggressive stance in Q3, stating that they expect an EBIT at a level similar to the previous year. However, they note that the market is soft and rates are declining.
Statement
A considerable increase since 2014, in the top line, where the first three quarters of 2023 alone more than double the result. However, it must be noted that 2023 is not performing as well as 2022. DSV has stated an EBIT of 17,500 - 18,500 is achievable, so it has decreased slightly since last year.
In general, the company looks robust, although the margins may have retreated a bit. For me, this financial statement appears strong.
net income | Ebit | Result | Margin | EBIT margin | |
2014 | 48582 | 2624 | 1491 | 3.07% | 5.40% |
2015 | 50869 | 3050 | 2058 | 4.05% | 6.00% |
2016 | 67747 | 3475 | 1678 | 2.48% | 5.13% |
2017 | 74901 | 4878 | 3012 | 4.02% | 6.51% |
2018 | 79053 | 5450 | 3988 | 5.04% | 6.89% |
2019 | 94701 | 6654 | 3706 | 3.91% | 7.03% |
2020 | 115932 | 9520 | 4250 | 3.67% | 8.21% |
2021 | 182306 | 16223 | 11254 | 6.17% | 8.90% |
2022 | 235665 | 25204 | 17671 | 7.50% | 10.69% |
2023q1-q3 | 114257 | 13773 | 9470 | 8.29% | 12.05% |
Balance
Considerable increase in interest-bearing debt and leasing costs.
Approximately 50% of the debt is from leasing. This leads to an increase in uncertainty, where I recommend keeping an eye on the trend.
Otherwise, both equity and liquidity have increased with the company, and the high EBIT means that the debt can theoretically be paid off quite quickly.
If we exclude the leasing component, the debt could be managed within 1 year, considering the liquidity.
Interest-bearing debt with leasing | Total Debt | Equity | Total Assets | Cash | |
2014 | 6291 | 17599 | 6081 | 23680 | 432 |
2015 | 4622 | 15884 | 11841 | 27725 | 4908 |
2016 | 10083 | 26989 | 13378 | 40367 | 1714 |
2017 | 6986 | 23579 | 14809 | 38388 | 1348 |
2018 | 7138 | 24280 | 14532 | 38812 | 1158 |
2019 | 20596 | 48238 | 49319 | 97557 | 2043 |
2020 | 21159 | 48953 | 47297 | 96250 | 4060 |
2021 | 36753 | 87117 | 74278 | 161395 | 8299 |
2022 | 38979 | 87304 | 71741 | 159045 | 10160 |
2023q1-q3 | 41065 | 80224 | 70449 | 150673 | 8596 |
Cash flow
Significant increase in cash flow, with a focus on share repurchases being a key aspect of this strategy.
Even with this volume of share repurchases, the total number of shares has increased significantly since 2014. This has occurred due to mergers and stock buybacks.
Overall, I am very satisfied with the cash flow in DSV.
Operation | Investment | Finance flow | Dividend | Stock buybacks | |
2014 | 1919 | -461 | -1569 | -270 | -932 |
2015 | 3160 | -431 | 1855 | -283 | 3821 |
2016 | 1273 | -4953 | 396 | -327 | 228 |
2017 | 4664 | -325 | -4715 | -342 | -1275 |
2018 | 4301 | -444 | -4000 | -380 | -3773 |
2019 | 6879 | 1371 | -7484 | -423 | -4248 |
2020 | 10276 | -556 | -6999 | -588 | -4223 |
2021 | 12202 | 420 | -8680 | -920 | -17063 |
2022 | 26846 | -966 | -24245 | -1320 | -20313 |
2023q1-q3 | 14499 | -1664 | -14176 | -1424 | -9696 |
Strengths
Strong finances
Good track record of acquisitions
Well-diversified
Shareholder-friendly
Weaknesses
Low dividend
Fuel-dependent (potential future investment constraints?)
Easy business to start in
Points to monitor
Continuation of leasing practices
Reduction of debt
Was 2022 the peak year? (Is the growth over?)
Brief summary
DSV operates in transportation by air, road, and sea, generating solid profits on both top and bottom lines. They are generally shareholder-friendly, with significant investments in share buybacks, although dividends are relatively low. The company has experienced rapid growth, and personally, I am looking forward to seeing how it progresses. Note: I don't understand why I don't have ownership here...
If you wish to delve deeper into the numbers, you can find the stock on my index page, where I have provided Google Sheets access for those interested.
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