CDW CORP/DE (CDW) Stock Fundamental Analysis
NASDAQ:CDW - Nasdaq - US12514G1085 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to CDW. CDW was compared to 125 industry peers in the Electronic Equipment, Instruments & Components industry. CDW scores excellent on profitability, but 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.
CDW had a positive operating cash flow in the past year.
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
The Return On Assets of CDW (7.24%) is better than 87.20% of its industry peers.
Looking at the Return On Equity, with a value of 46.77%, CDW belongs to the top of the industry, outperforming 99.20% of the companies in the same industry.
CDW has a Return On Invested Capital of 13.79%. This is amongst the best in the industry. CDW outperforms 91.20% of its industry peers.
CDW had an Average Return On Invested Capital over the past 3 years of 15.27%. This is significantly above the industry average of 9.38%.
| 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
Looking at the Profit Margin, with a value of 5.10%, CDW is in the better half of the industry, outperforming 73.60% of the companies in the same industry.
In the last couple of years the Profit Margin of CDW has grown nicely.
Looking at the Operating Margin, with a value of 7.90%, CDW is in the better half of the industry, outperforming 76.80% of the companies in the same industry.
CDW's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 21.86%, CDW is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
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
CDW has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, CDW has less shares outstanding
Compared to 5 years ago, CDW has less shares outstanding
The debt/assets ratio for CDW has been reduced compared to a year ago.
2.2 Solvency
CDW has an Altman-Z score of 2.92. This is not the best score and indicates that CDW is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of CDW (2.92) is comparable to the rest of the industry.
CDW has a debt to FCF ratio of 5.83. This is a neutral value as CDW would need 5.83 years to pay back of all of its debts.
With a Debt to FCF ratio value of 5.83, CDW perfoms like the industry average, outperforming 57.60% of the companies in the same industry.
CDW has a Debt/Equity ratio of 2.42. This is a high value indicating a heavy dependency on external financing.
CDW has a worse Debt to Equity ratio (2.42) than 96.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.42 | ||
| Debt/FCF | 5.83 | ||
| Altman-Z | 2.92 |
ROIC/WACC1.72
WACC8.01%
2.3 Liquidity
A Current Ratio of 1.32 indicates that CDW should not have too much problems paying its short term obligations.
With a Current ratio value of 1.32, CDW is not doing good in the industry: 82.40% of the companies in the same industry are doing better.
CDW has a Quick Ratio of 1.20. This is a normal value and indicates that CDW is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.20, CDW is not doing good in the industry: 72.00% of the companies in the same industry are doing better.
| 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.
The Earnings Per Share has been growing by 9.30% on average over the past years. This is quite good.
The Revenue has been growing slightly by 0.85% in the past year.
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
The Earnings Per Share is expected to grow by 6.76% on average over the next years.
Based on estimates for the next years, CDW will show a small growth in Revenue. The Revenue will grow by 4.43% on average per year.
EPS Next Y3.29%
EPS Next 2Y4.78%
EPS Next 3Y6.76%
EPS Next 5YN/A
Revenue Next Year3.77%
Revenue Next 2Y3.78%
Revenue Next 3Y4.43%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
CDW is valuated rather expensively with a Price/Earnings ratio of 18.56.
Based on the Price/Earnings ratio, CDW is valued cheaply inside the industry as 81.60% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of CDW to the average of the S&P500 Index (27.21), we can say CDW is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 17.31, the valuation of CDW can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CDW indicates a somewhat cheap valuation: CDW is cheaper than 76.00% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of CDW to the average of the S&P500 Index (21.70), we can say CDW is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.56 | ||
| Fwd PE | 17.31 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CDW is valued a bit cheaper than 71.20% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, CDW is valued a bit cheaper than 72.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.75 | ||
| EV/EBITDA | 14.47 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CDW does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of CDW may justify a higher PE ratio.
PEG (NY)5.64
PEG (5Y)2
EPS Next 2Y4.78%
EPS Next 3Y6.76%
5. Dividend
5.1 Amount
CDW has a Yearly Dividend Yield of 1.41%.
CDW's Dividend Yield is rather good when compared to the industry average which is at 1.95. CDW pays more dividend than 89.60% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, CDW's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.41% |
5.2 History
On average, the dividend of CDW grows each year by 14.59%, which is quite nice.
CDW has paid a dividend for at least 10 years, which is a reliable track record.
CDW has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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.
CDW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP30.52%
EPS Next 2Y4.78%
EPS Next 3Y6.76%
181.16
+2.57 (+1.44%)
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-1.42%
Ins Owners0.19%
Ins Owner Change6.3%
Market Cap23.86B
Analysts76.47
Price Target215.44 (18.92%)
Short Float %2.81%
Short Ratio2.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.41% |
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)-0.69%
PT rev (3m)-7.49%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.81%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.16%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.11%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.56 | ||
| Fwd PE | 17.31 | ||
| P/S | 1.12 | ||
| P/FCF | 23.75 | ||
| P/OCF | 21.22 | ||
| P/B | 10.27 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.47 |
EPS(TTM)9.76
EY5.39%
EPS(NY)10.46
Fwd EY5.78%
FCF(TTM)7.63
FCFY4.21%
OCF(TTM)8.54
OCFY4.71%
SpS161.93
BVpS17.64
TBVpS-27.54
PEG (NY)5.64
PEG (5Y)2
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 | 2.92 |
F-Score6
WACC8.01%
ROIC/WACC1.72
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 Year3.77%
Revenue Next 2Y3.78%
Revenue Next 3Y4.43%
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%