Overall DCO gets a fundamental rating of 4 out of 10. We evaluated DCO against 73 industry peers in the Aerospace & Defense industry. DCO has only an average score on both its financial health and profitability. DCO has a correct valuation and a medium growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

DCO had positive earnings in the past year.
DCO had a positive operating cash flow in the past year.
DCO had positive earnings in each of the past 5 years.
DCO had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

DCO's Return On Assets of -2.77% is on the low side compared to the rest of the industry. DCO is outperformed by 63.01% of its industry peers.
DCO has a worse Return On Equity (-5.33%) than 63.01% of its industry peers.
DCO has a Return On Invested Capital of 6.84%. This is comparable to the rest of the industry: DCO outperforms 58.90% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DCO is below the industry average of 8.56%.
The last Return On Invested Capital (6.84%) for DCO is above the 3 year average (5.06%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	-2.77%
ROE	-5.33%
ROIC	6.84%

ROA(3y)2.35%

ROA(5y)4.87%

ROE(3y)4.2%

ROE(5y)10%

ROIC(3y)5.06%

ROIC(5y)5.43%

1.3 Margins

DCO's Profit Margin has declined in the last couple of years.
The Operating Margin of DCO (8.50%) is comparable to the rest of the industry.
DCO's Operating Margin has been stable in the last couple of years.
DCO's Gross Margin of 25.98% is in line compared to the rest of the industry. DCO outperforms 54.79% of its industry peers.
In the last couple of years the Gross Margin of DCO has grown nicely.

		Industry Rank	Sector Rank
OM	8.5%
PM (TTM)	N/A
GM	25.98%

OM growth 3Y-0.44%

OM growth 5Y-0.51%

PM growth 3Y-42.44%

PM growth 5Y-2.34%

GM growth 3Y4.56%

GM growth 5Y3.64%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

DCO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, DCO has more shares outstanding
Compared to 5 years ago, DCO has more shares outstanding
DCO has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 3.34 indicates that DCO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.34, DCO is in line with its industry, outperforming 45.21% of the companies in the same industry.
DCO has a debt to FCF ratio of 5.09. This is a neutral value as DCO would need 5.09 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.09, DCO is in the better half of the industry, outperforming 71.23% of the companies in the same industry.
DCO has a Debt/Equity ratio of 0.33. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.33, DCO is doing good in the industry, outperforming 63.01% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.33
Debt/FCF	5.09
Altman-Z	3.34

ROIC/WACC0.69

WACC9.89%

2.3 Liquidity

A Current Ratio of 2.04 indicates that DCO has no problem at all paying its short term obligations.
With a Current ratio value of 2.04, DCO is not doing good in the industry: 60.27% of the companies in the same industry are doing better.
A Quick Ratio of 1.46 indicates that DCO should not have too much problems paying its short term obligations.
DCO has a Quick ratio (1.46) which is in line with its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.04
Quick Ratio	1.46

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 7.14% over the past year.
Measured over the past 5 years, DCO shows a small growth in Earnings Per Share. The EPS has been growing by 3.52% on average per year.
DCO shows a small growth in Revenue. In the last year, the Revenue has grown by 3.16%.
The Revenue has been growing slightly by 1.75% on average over the past years.

EPS 1Y (TTM)7.14%

EPS 3Y3.61%

EPS 5Y3.52%

EPS Q2Q%0%

Revenue 1Y (TTM)3.16%

Revenue growth 3Y6.81%

Revenue growth 5Y1.75%

Sales Q2Q%5.53%

3.2 Future

DCO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.12% yearly.
The Revenue is expected to grow by 7.02% on average over the next years.

EPS Next Y14.13%

EPS Next 2Y17.02%

EPS Next 3Y18.12%

EPS Next 5YN/A

Revenue Next Year5.28%

Revenue Next 2Y6.65%

Revenue Next 3Y7.02%

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 accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

DCO is valuated quite expensively with a Price/Earnings ratio of 33.35.
DCO's Price/Earnings ratio is a bit cheaper when compared to the industry. DCO is cheaper than 79.45% of the companies in the same industry.
DCO's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.32.
DCO is valuated quite expensively with a Price/Forward Earnings ratio of 25.70.
DCO's Price/Forward Earnings ratio is rather cheap when compared to the industry. DCO is cheaper than 87.67% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 24.32. DCO is around the same levels.

		Industry Rank	Sector Rank
PE	33.35
Fwd PE	25.7

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, DCO is valued cheaper than 83.56% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DCO is valued cheaper than 82.19% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	38.5
EV/EBITDA	18.6

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DCO does not grow enough to justify the current Price/Earnings ratio.
DCO's earnings are expected to grow with 18.12% in the coming years. This may justify a more expensive valuation.