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. While CDW belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. CDW is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year CDW was profitable.
In the past year CDW had a positive cash flow from operations.
CDW had positive earnings in each of the past 5 years.
In the past 5 years CDW always reported a positive cash flow from operatings.
1.2 Ratios
CDW's Return On Assets of 7.34% is amongst the best of the industry. CDW outperforms 87.20% of its industry peers.
CDW's Return On Equity of 45.81% is amongst the best of the industry. CDW outperforms 99.20% of its industry peers.
The Return On Invested Capital of CDW (13.57%) is better than 90.40% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CDW is significantly above the industry average of 9.29%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.34% | ||
| ROE | 45.81% | ||
| ROIC | 13.57% |
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
The Profit Margin of CDW (5.13%) is better than 73.60% of its industry peers.
CDW's Profit Margin has improved in the last couple of years.
CDW has a Operating Margin of 7.86%. This is in the better half of the industry: CDW outperforms 76.80% of its industry peers.
In the last couple of years the Operating Margin of CDW has grown nicely.
The Gross Margin of CDW (21.92%) is worse than 60.80% of its industry peers.
CDW's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.86% | ||
| PM (TTM) | 5.13% | ||
| GM | 21.92% |
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 just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, CDW has less shares outstanding
Compared to 5 years ago, CDW has less shares outstanding
Compared to 1 year ago, CDW has an improved debt to assets ratio.
2.2 Solvency
CDW has an Altman-Z score of 3.04. This indicates that CDW is financially healthy and has little risk of bankruptcy at the moment.
CDW has a Altman-Z score of 3.04. This is comparable to the rest of the industry: CDW outperforms 52.80% of its industry peers.
The Debt to FCF ratio of CDW is 5.06, which is a neutral value as it means it would take CDW, 5.06 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.06, CDW is in the better half of the industry, outperforming 60.80% of the companies in the same industry.
CDW has a Debt/Equity ratio of 2.38. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of CDW (2.38) is worse than 93.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.38 | ||
| Debt/FCF | 5.06 | ||
| Altman-Z | 3.04 |
ROIC/WACC1.54
WACC8.8%
2.3 Liquidity
CDW has a Current Ratio of 1.35. This is a normal value and indicates that CDW is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.35, CDW is doing worse than 80.00% of the companies in the same industry.
CDW has a Quick Ratio of 1.24. This is a normal value and indicates that CDW is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.24, CDW is doing worse than 65.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.24 |
3. Growth
3.1 Past
CDW shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -0.10%.
CDW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.30% yearly.
Looking at the last year, CDW shows a decrease in Revenue. The Revenue has decreased by -1.77% in the last year.
Measured over the past years, CDW shows a small growth in Revenue. The Revenue has been growing by 3.09% on average per year.
EPS 1Y (TTM)-0.1%
EPS 3Y6.14%
EPS 5Y9.3%
EPS Q2Q%11.98%
Revenue 1Y (TTM)-1.77%
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.
CDW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.22% yearly.
EPS Next Y3.29%
EPS Next 2Y4.78%
EPS Next 3Y6.76%
EPS Next 5YN/A
Revenue Next Year3.74%
Revenue Next 2Y3.74%
Revenue Next 3Y4.22%
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
A Price/Earnings ratio of 19.27 indicates a rather expensive valuation of CDW.
Compared to the rest of the industry, the Price/Earnings ratio of CDW indicates a somewhat cheap valuation: CDW is cheaper than 76.00% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.60, CDW is valued a bit cheaper.
CDW is valuated rather expensively with a Price/Forward Earnings ratio of 17.98.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CDW indicates a somewhat cheap valuation: CDW is cheaper than 68.00% 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 (22.43), we can say CDW is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.27 | ||
| Fwd PE | 17.98 |
4.2 Price Multiples
CDW's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. CDW is cheaper than 65.60% of the companies in the same industry.
74.40% 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 | 21.47 | ||
| EV/EBITDA | 15.41 |
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)5.86
PEG (5Y)2.07
EPS Next 2Y4.78%
EPS Next 3Y6.76%
5. Dividend
5.1 Amount
CDW has a Yearly Dividend Yield of 1.33%.
CDW's Dividend Yield is rather good when compared to the industry average which is at 2.07. CDW pays more dividend than 88.80% of the companies in the same industry.
With a Dividend Yield of 1.33, CDW pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.33% |
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
CDW pays out 30.81% of its income as dividend. This is a sustainable payout ratio.
CDW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP30.81%
EPS Next 2Y4.78%
EPS Next 3Y6.76%
188.1
+0.06 (+0.03%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners95.06%
Inst Owner Change-1.3%
Ins Owners0.2%
Ins Owner Change6.29%
Market Cap24.79B
Analysts76.47
Price Target216.92 (15.32%)
Short Float %2.27%
Short Ratio1.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.33% |
Yearly Dividend2.49
Dividend Growth(5Y)14.59%
DP30.81%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.56%
Min EPS beat(2)-8.79%
Max EPS beat(2)5.67%
EPS beat(4)1
Avg EPS beat(4)-4.2%
Min EPS beat(4)-11.53%
Max EPS beat(4)5.67%
EPS beat(8)4
Avg EPS beat(8)-0.59%
EPS beat(12)7
Avg EPS beat(12)0.58%
EPS beat(16)11
Avg EPS beat(16)2.52%
Revenue beat(2)1
Avg Revenue beat(2)-0.42%
Min Revenue beat(2)-4.49%
Max Revenue beat(2)3.66%
Revenue beat(4)1
Avg Revenue beat(4)-1.35%
Min Revenue beat(4)-4.49%
Max Revenue beat(4)3.66%
Revenue beat(8)2
Avg Revenue beat(8)-1.8%
Revenue beat(12)3
Avg Revenue beat(12)-2.2%
Revenue beat(16)6
Avg Revenue beat(16)-1.03%
PT rev (1m)-6.18%
PT rev (3m)-4.21%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.01%
EPS NY rev (1m)1.69%
EPS NY rev (3m)-0.16%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.79%
Revenue NY rev (3m)0.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.27 | ||
| Fwd PE | 17.98 | ||
| P/S | 1.18 | ||
| P/FCF | 21.47 | ||
| P/OCF | 19.4 | ||
| P/B | 10.54 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.41 |
EPS(TTM)9.76
EY5.19%
EPS(NY)10.46
Fwd EY5.56%
FCF(TTM)8.76
FCFY4.66%
OCF(TTM)9.69
OCFY5.15%
SpS159.36
BVpS17.85
TBVpS-27.5
PEG (NY)5.86
PEG (5Y)2.07
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.34% | ||
| ROE | 45.81% | ||
| ROCE | 17.94% | ||
| ROIC | 13.57% | ||
| ROICexc | 14.71% | ||
| ROICexgc | 49.76% | ||
| OM | 7.86% | ||
| PM (TTM) | 5.13% | ||
| GM | 21.92% | ||
| FCFM | 5.5% |
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 Turnover1.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.38 | ||
| Debt/FCF | 5.06 | ||
| Debt/EBITDA | 2.91 | ||
| Cap/Depr | 44.53% | ||
| Cap/Sales | 0.58% | ||
| Interest Coverage | 7.59 | ||
| Cash Conversion | 66.3% | ||
| Profit Quality | 107.14% | ||
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.24 | ||
| Altman-Z | 3.04 |
F-Score6
WACC8.8%
ROIC/WACC1.54
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)-1.77%
Revenue growth 3Y0.28%
Revenue growth 5Y3.09%
Sales Q2Q%6.7%
Revenue Next Year3.74%
Revenue Next 2Y3.74%
Revenue Next 3Y4.22%
Revenue Next 5YN/A
EBIT growth 1Y-1.76%
EBIT growth 3Y5.18%
EBIT growth 5Y7.81%
EBIT Next Year11.07%
EBIT Next 3Y7.87%
EBIT Next 5YN/A
FCF growth 1Y-20.39%
FCF growth 3Y19.04%
FCF growth 5Y7.86%
OCF growth 1Y-20.1%
OCF growth 3Y17.64%
OCF growth 5Y4.45%