CDW CORP/DE (CDW) Stock Fundamental Analysis
NASDAQ:CDW - Nasdaq - US12514G1085 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to CDW. CDW was compared to 124 industry peers in the Electronic Equipment, Instruments & Components industry. While CDW belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. CDW has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
CDW had positive earnings in the past year.
In the past year CDW had a positive cash flow from operations.
In the past 5 years CDW has always been profitable.
Each year in the past 5 years CDW had a positive operating cash flow.
1.2 Ratios
CDW's Return On Assets of 7.24% is amongst the best of the industry. CDW outperforms 85.48% of its industry peers.
CDW has a Return On Equity of 46.77%. This is amongst the best in the industry. CDW outperforms 98.39% of its industry peers.
The Return On Invested Capital of CDW (13.79%) is better than 91.13% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CDW is significantly above the industry average of 9.55%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.24% | ||
| ROE | 46.77% | ||
| ROIC | 13.79% |
ROA(3y)8.05%
ROA(5y)8.02%
ROE(3y)56.48%
ROE(5y)74.07%
ROIC(3y)15.27%
ROIC(5y)15.08%
1.3 Margins
With a decent Profit Margin value of 5.10%, CDW is doing good in the industry, outperforming 71.77% of the companies in the same industry.
CDW's Profit Margin has improved in the last couple of years.
The Operating Margin of CDW (7.90%) is better than 75.81% of its industry peers.
In the last couple of years the Operating Margin of CDW has grown nicely.
CDW has a worse Gross Margin (21.86%) than 60.48% of its industry peers.
CDW's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.9% | ||
| PM (TTM) | 5.1% | ||
| GM | 21.86% |
OM growth 3Y4.89%
OM growth 5Y4.57%
PM growth 3Y2.62%
PM growth 5Y4.66%
GM growth 3Y8.54%
GM growth 5Y5.39%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CDW is still creating some value.
The number of shares outstanding for CDW has been reduced compared to 1 year ago.
CDW has less shares outstanding than it did 5 years ago.
CDW has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.84 indicates that CDW is not a great score, but indicates only limited risk for bankruptcy at the moment.
CDW has a Altman-Z score of 2.84. This is comparable to the rest of the industry: CDW outperforms 41.94% of its industry peers.
The Debt to FCF ratio of CDW is 5.83, which is a neutral value as it means it would take CDW, 5.83 years of fcf income to pay off all of its debts.
CDW has a Debt to FCF ratio (5.83) which is comparable to the rest of the industry.
A Debt/Equity ratio of 2.42 is on the high side and indicates that CDW has dependencies on debt financing.
CDW has a Debt to Equity ratio of 2.42. This is amonst the worse of the industry: CDW underperforms 95.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.42 | ||
| Debt/FCF | 5.83 | ||
| Altman-Z | 2.84 |
ROIC/WACC1.55
WACC8.87%
2.3 Liquidity
CDW has a Current Ratio of 1.32. This is a normal value and indicates that CDW is financially healthy and should not expect problems in meeting its short term obligations.
CDW's Current ratio of 1.32 is on the low side compared to the rest of the industry. CDW is outperformed by 80.65% of its industry peers.
A Quick Ratio of 1.20 indicates that CDW should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.20, CDW is doing worse than 69.35% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.32 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
The earnings per share for CDW have decreased by -0.10% in the last year.
CDW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.30% yearly.
CDW shows a small growth in Revenue. In the last year, the Revenue has grown by 0.85%.
The Revenue has been growing slightly by 3.09% on average over the past years.
EPS 1Y (TTM)-0.1%
EPS 3Y6.14%
EPS 5Y9.3%
EPS Q2Q%11.98%
Revenue 1Y (TTM)0.85%
Revenue growth 3Y0.28%
Revenue growth 5Y3.09%
Sales Q2Q%6.7%
3.2 Future
CDW is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.76% yearly.
Based on estimates for the next years, CDW will show a small growth in Revenue. The Revenue will grow by 4.21% on average per year.
EPS Next Y3.29%
EPS Next 2Y4.78%
EPS Next 3Y6.76%
EPS Next 5YN/A
Revenue Next Year3.81%
Revenue Next 2Y3.8%
Revenue Next 3Y4.21%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
CDW is valuated correctly with a Price/Earnings ratio of 16.96.
Based on the Price/Earnings ratio, CDW is valued cheaply inside the industry as 84.68% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of CDW to the average of the S&P500 Index (26.99), we can say CDW is valued slightly cheaper.
CDW is valuated correctly with a Price/Forward Earnings ratio of 15.82.
Based on the Price/Forward Earnings ratio, CDW is valued cheaply inside the industry as 81.45% of the companies are valued more expensively.
CDW's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 36.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.96 | ||
| Fwd PE | 15.82 |
4.2 Price Multiples
CDW's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. CDW is cheaper than 73.39% of the companies in the same industry.
76.61% of the companies in the same industry are more expensive than CDW, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.7 | ||
| EV/EBITDA | 13.57 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
CDW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.16
PEG (5Y)1.82
EPS Next 2Y4.78%
EPS Next 3Y6.76%
5. Dividend
5.1 Amount
CDW has a Yearly Dividend Yield of 1.51%. Purely for dividend investing, there may be better candidates out there.
CDW's Dividend Yield is rather good when compared to the industry average which is at 1.78. CDW pays more dividend than 90.32% of the companies in the same industry.
CDW's Dividend Yield is slightly below the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.51% |
5.2 History
On average, the dividend of CDW grows each year by 14.59%, which is quite nice.
CDW has been paying a dividend for at least 10 years, so it has a reliable track record.
CDW has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)14.59%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
30.52% of the earnings are spent on dividend by CDW. This is a low number and sustainable payout ratio.
The dividend of CDW is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP30.52%
EPS Next 2Y4.78%
EPS Next 3Y6.76%
165.51
+0.27 (+0.16%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners96.46%
Inst Owner Change-0.07%
Ins Owners0.19%
Ins Owner Change6.32%
Market Cap21.80B
Analysts76.47
Price Target217.48 (31.4%)
Short Float %2.8%
Short Ratio3.56
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.51% |
Yearly Dividend2.49
Dividend Growth(5Y)14.59%
DP30.52%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.08%
Min EPS beat(2)5.67%
Max EPS beat(2)8.48%
EPS beat(4)2
Avg EPS beat(4)0.81%
Min EPS beat(4)-8.79%
Max EPS beat(4)8.48%
EPS beat(8)4
Avg EPS beat(8)0.44%
EPS beat(12)7
Avg EPS beat(12)0.6%
EPS beat(16)11
Avg EPS beat(16)2.25%
Revenue beat(2)2
Avg Revenue beat(2)4%
Min Revenue beat(2)3.66%
Max Revenue beat(2)4.34%
Revenue beat(4)2
Avg Revenue beat(4)0.62%
Min Revenue beat(4)-4.49%
Max Revenue beat(4)4.34%
Revenue beat(8)3
Avg Revenue beat(8)-1.14%
Revenue beat(12)3
Avg Revenue beat(12)-2.17%
Revenue beat(16)6
Avg Revenue beat(16)-1%
PT rev (1m)0.95%
PT rev (3m)0.25%
EPS NQ rev (1m)0.24%
EPS NQ rev (3m)1%
EPS NY rev (1m)0%
EPS NY rev (3m)1.69%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)0.2%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)1.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.96 | ||
| Fwd PE | 15.82 | ||
| P/S | 1.02 | ||
| P/FCF | 21.7 | ||
| P/OCF | 19.38 | ||
| P/B | 9.38 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.57 |
EPS(TTM)9.76
EY5.9%
EPS(NY)10.46
Fwd EY6.32%
FCF(TTM)7.63
FCFY4.61%
OCF(TTM)8.54
OCFY5.16%
SpS161.93
BVpS17.64
TBVpS-27.54
PEG (NY)5.16
PEG (5Y)1.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.24% | ||
| ROE | 46.77% | ||
| ROCE | 18.24% | ||
| ROIC | 13.79% | ||
| ROICexc | 14.9% | ||
| ROICexgc | 49.02% | ||
| OM | 7.9% | ||
| PM (TTM) | 5.1% | ||
| GM | 21.86% | ||
| FCFM | 4.71% |
ROA(3y)8.05%
ROA(5y)8.02%
ROE(3y)56.48%
ROE(5y)74.07%
ROIC(3y)15.27%
ROIC(5y)15.08%
ROICexc(3y)16.3%
ROICexc(5y)16.93%
ROICexgc(3y)66.87%
ROICexgc(5y)69.73%
ROCE(3y)20.19%
ROCE(5y)19.95%
ROICexcg growth 3Y-5.25%
ROICexcg growth 5Y-6.87%
ROICexc growth 3Y2.46%
ROICexc growth 5Y-5.66%
OM growth 3Y4.89%
OM growth 5Y4.57%
PM growth 3Y2.62%
PM growth 5Y4.66%
GM growth 3Y8.54%
GM growth 5Y5.39%
F-Score6
Asset Turnover1.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.42 | ||
| Debt/FCF | 5.83 | ||
| Debt/EBITDA | 2.86 | ||
| Cap/Depr | 42.42% | ||
| Cap/Sales | 0.56% | ||
| Interest Coverage | 6.77 | ||
| Cash Conversion | 57.15% | ||
| Profit Quality | 92.44% | ||
| Current Ratio | 1.32 | ||
| Quick Ratio | 1.2 | ||
| Altman-Z | 2.84 |
F-Score6
WACC8.87%
ROIC/WACC1.55
Cap/Depr(3y)47.75%
Cap/Depr(5y)46.54%
Cap/Sales(3y)0.61%
Cap/Sales(5y)0.63%
Profit Quality(3y)115.61%
Profit Quality(5y)112.52%
High Growth Momentum
Growth
EPS 1Y (TTM)-0.1%
EPS 3Y6.14%
EPS 5Y9.3%
EPS Q2Q%11.98%
EPS Next Y3.29%
EPS Next 2Y4.78%
EPS Next 3Y6.76%
EPS Next 5YN/A
Revenue 1Y (TTM)0.85%
Revenue growth 3Y0.28%
Revenue growth 5Y3.09%
Sales Q2Q%6.7%
Revenue Next Year3.81%
Revenue Next 2Y3.8%
Revenue Next 3Y4.21%
Revenue Next 5YN/A
EBIT growth 1Y1.88%
EBIT growth 3Y5.18%
EBIT growth 5Y7.81%
EBIT Next Year9.93%
EBIT Next 3Y6.98%
EBIT Next 5YN/A
FCF growth 1Y-16.45%
FCF growth 3Y19.04%
FCF growth 5Y7.86%
OCF growth 1Y-14.84%
OCF growth 3Y17.64%
OCF growth 5Y4.45%