DOLBY LABORATORIES INC-CL A (DLB) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DLB - US25659T1079 - Common Stock
61.24 USD
-0.12 (-0.2%)
Taking everything into account, DLB scores 7 out of 10 in our fundamental rating. DLB was compared to 278 industry peers in the Software industry. DLB scores excellent points on both the profitability and health parts. This is a solid base for a good stock. DLB has a decent growth rate and is not valued too expensively. Finally DLB also has an excellent dividend rating. With these ratings, DLB could be worth investigating further for dividend investing!.
1. Profitability
1.1 Basic Checks
- DLB had positive earnings in the past year.
- In the past year DLB had a positive cash flow from operations.
- In the past 5 years DLB has always been profitable.
- Each year in the past 5 years DLB had a positive operating cash flow.
1.2 Ratios
- With a decent Return On Assets value of 7.90%, DLB is doing good in the industry, outperforming 79.50% of the companies in the same industry.
- DLB has a Return On Equity of 9.72%. This is in the better half of the industry: DLB outperforms 73.38% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 8.48%, DLB belongs to the top of the industry, outperforming 80.22% of the companies in the same industry.
- DLB had an Average Return On Invested Capital over the past 3 years of 8.50%. This is below the industry average of 10.76%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.9% | ||
| ROE | 9.72% | ||
| ROIC | 8.48% |
ROA(3y)7.69%
ROA(5y)7.98%
ROE(3y)9.61%
ROE(5y)9.79%
ROIC(3y)8.5%
ROIC(5y)8.69%
1.3 Margins
- With an excellent Profit Margin value of 18.90%, DLB belongs to the best of the industry, outperforming 81.65% of the companies in the same industry.
- DLB's Profit Margin has been stable in the last couple of years.
- Looking at the Operating Margin, with a value of 20.75%, DLB belongs to the top of the industry, outperforming 86.69% of the companies in the same industry.
- DLB's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 88.13%, DLB belongs to the top of the industry, outperforming 94.96% of the companies in the same industry.
- In the last couple of years the Gross Margin of DLB has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.75% | ||
| PM (TTM) | 18.9% | ||
| GM | 88.13% |
OM growth 3Y6.2%
OM growth 5Y1.8%
PM growth 3Y8.78%
PM growth 5Y-1.04%
GM growth 3Y-0.22%
GM growth 5Y0.17%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DLB is destroying value.
- Compared to 1 year ago, DLB has about the same amount of shares outstanding.
- The number of shares outstanding for DLB has been reduced compared to 5 years ago.
- DLB has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
- DLB has an Altman-Z score of 8.01. This indicates that DLB is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 8.01, DLB belongs to the top of the industry, outperforming 84.17% of the companies in the same industry.
- DLB has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 8.01 |
ROIC/WACC0.77
WACC11.08%
2.3 Liquidity
- A Current Ratio of 3.17 indicates that DLB has no problem at all paying its short term obligations.
- The Current ratio of DLB (3.17) is better than 76.26% of its industry peers.
- A Quick Ratio of 3.10 indicates that DLB has no problem at all paying its short term obligations.
- The Quick ratio of DLB (3.10) is better than 75.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.17 | ||
| Quick Ratio | 3.1 |
3. Growth
3.1 Past
- DLB shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.84%, which is quite good.
- Measured over the past years, DLB shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.55% on average per year.
- The Revenue has been growing slightly by 5.92% in the past year.
- DLB shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.03% yearly.
EPS 1Y (TTM)11.84%
EPS 3Y10.5%
EPS 5Y8.55%
EPS Q2Q%22.22%
Revenue 1Y (TTM)5.92%
Revenue growth 3Y2.47%
Revenue growth 5Y3.03%
Sales Q2Q%0.73%
3.2 Future
- DLB is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.99% yearly.
- Based on estimates for the next years, DLB will show a small growth in Revenue. The Revenue will grow by 4.88% on average per year.
EPS Next Y0.45%
EPS Next 2Y3.53%
EPS Next 3Y5.99%
EPS Next 5YN/A
Revenue Next Year4.19%
Revenue Next 2Y4.28%
Revenue Next 3Y4.88%
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
- With a Price/Earnings ratio of 14.41, DLB is valued correctly.
- Based on the Price/Earnings ratio, DLB is valued cheaply inside the industry as 81.65% of the companies are valued more expensively.
- DLB is valuated cheaply when we compare the Price/Earnings ratio to 28.82, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 14.35 indicates a correct valuation of DLB.
- DLB's Price/Forward Earnings ratio is rather cheap when compared to the industry. DLB is cheaper than 81.30% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.95. DLB is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.41 | ||
| Fwd PE | 14.35 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DLB indicates a rather cheap valuation: DLB is cheaper than 83.45% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, DLB is valued cheaply inside the industry as 86.69% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.59 | ||
| EV/EBITDA | 14.02 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The decent profitability rating of DLB may justify a higher PE ratio.
PEG (NY)32.34
PEG (5Y)1.69
EPS Next 2Y3.53%
EPS Next 3Y5.99%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.30%, DLB has a reasonable but not impressive dividend return.
- DLB's Dividend Yield is rather good when compared to the industry average which is at 0.54. DLB pays more dividend than 95.68% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, DLB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
5.2 History
- On average, the dividend of DLB grows each year by 8.45%, which is quite nice.
- DLB has been paying a dividend for at least 10 years, so it has a reliable track record.
- DLB has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.45%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
- 49.64% of the earnings are spent on dividend by DLB. This is a bit on the high side, but may be sustainable.
- The dividend of DLB is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP49.64%
EPS Next 2Y3.53%
EPS Next 3Y5.99%
DOLBY LABORATORIES INC-CL A / DLB FAQ
What is the fundamental rating for DLB stock?
ChartMill assigns a fundamental rating of 7 / 10 to DLB.
What is the valuation status for DLB stock?
ChartMill assigns a valuation rating of 6 / 10 to DOLBY LABORATORIES INC-CL A (DLB). This can be considered as Fairly Valued.
What is the profitability of DLB stock?
DOLBY LABORATORIES INC-CL A (DLB) has a profitability rating of 7 / 10.
What is the expected EPS growth for DOLBY LABORATORIES INC-CL A (DLB) stock?
The Earnings per Share (EPS) of DOLBY LABORATORIES INC-CL A (DLB) is expected to grow by 0.45% in the next year.
Can you provide the dividend sustainability for DLB stock?
The dividend rating of DOLBY LABORATORIES INC-CL A (DLB) is 7 / 10 and the dividend payout ratio is 49.64%.