Critical Survey: Dollarama (DLMAF) versus Its Peers

Dollarama (OTCMKTS:DLMAF) is one of 142 publicly-traded companies in the “Broadline Retail” industry, but how does it contrast to its competitors? We will compare Dollarama to related businesses based on the strength of its profitability, risk, valuation, analyst recommendations, earnings, dividends and institutional ownership.

Earnings & Valuation

This table compares Dollarama and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Dollarama	$5.21 billion	$940.70 million	52.10
Dollarama Competitors	$22.54 billion	$1.73 billion	-220.48

Dollarama’s competitors have higher revenue and earnings than Dollarama. Dollarama is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Insider and Institutional Ownership

44.4% of shares of all “Broadline Retail” companies are held by institutional investors. 24.0% of shares of all “Broadline Retail” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Dollarama and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dollarama	0	4	5	4	3.00
Dollarama Competitors	1355	5318	10701	295	2.56

As a group, “Broadline Retail” companies have a potential upside of 14.11%. Given Dollarama’s competitors higher probable upside, analysts plainly believe Dollarama has less favorable growth aspects than its competitors.

Profitability

This table compares Dollarama and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dollarama	17.65%	94.77%	17.12%
Dollarama Competitors	-3.17%	-34.71%	-1.48%

Dividends

Dollarama pays an annual dividend of $0.33 per share and has a dividend yield of 0.2%. Dollarama pays out 12.5% of its earnings in the form of a dividend. As a group, “Broadline Retail” companies pay a dividend yield of 31.9% and pay out 12.4% of their earnings in the form of a dividend. Dollarama lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Dollarama competitors beat Dollarama on 8 of the 14 factors compared.

About Dollarama

Dollarama Inc. operates a chain of dollar stores in Canada. Its stores offer general merchandise, consumables, and seasonal products. It also sells its products through online store. The company was formerly known as Dollarama Capital Corporation and changed its name to Dollarama Inc. in September 2009. Dollarama Inc. was founded in 1992 and is headquartered in Mount Royal, Canada.