Dollarama Inc.
Dollarama Inc. Fundamental Analysis
Dollarama Inc. (DOL.TO) shows moderate financial fundamentals with a PE ratio of 35.65, profit margin of 18.05%, and ROE of 94.71%. The company generates $7.2B in annual revenue with moderate year-over-year growth of 9.30%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 56.1/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze DOL.TO's fundamental strength across five key dimensions:
Efficiency Score
ExcellentDOL.TO demonstrates superior asset utilization.
Valuation Score
WeakDOL.TO trades at a premium to fair value.
Growth Score
ExcellentDOL.TO delivers strong and consistent growth momentum.
Financial Health Score
ModerateDOL.TO shows balanced financial health with some risks.
Profitability Score
ExcellentDOL.TO achieves industry-leading margins.
Key Financial Metrics
Is DOL.TO Expensive or Cheap?
P/E Ratio
DOL.TO trades at 35.65 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, DOL.TO's PEG of 42.06 indicates potential overvaluation.
Price to Book
The market values Dollarama Inc. at 32.06 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 19.36 times EBITDA. This signals the market has high growth expectations.
How Well Does DOL.TO Make Money?
Net Profit Margin
For every $100 in sales, Dollarama Inc. keeps $18.05 as profit after all expenses.
Operating Margin
Core operations generate 25.12 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $94.71 in profit for every $100 of shareholder equity.
ROA
Dollarama Inc. generates $17.32 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Dollarama Inc. produces operating cash flow of $1.64B, showing steady but balanced cash generation.
Free Cash Flow
Dollarama Inc. generates strong free cash flow of $1.38B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $5.08 in free cash annually.
FCF Yield
DOL.TO converts 2.98% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
35.65
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
42.06
vs 25 benchmark
P/B Ratio
Price to book value ratio
32.06
vs 25 benchmark
P/S Ratio
Price to sales ratio
6.42
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.71
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.13
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.95
vs 25 benchmark
ROA
Return on assets percentage
0.17
vs 25 benchmark
ROCE
Return on capital employed
0.29
vs 25 benchmark
How DOL.TO Stacks Against Its Sector Peers
| Metric | DOL.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 35.65 | 22.46 | Worse (Expensive) |
| ROE | 94.71% | 1260.00% | Weak |
| Net Margin | 18.05% | -5313.00% (disorted) | Strong |
| Debt/Equity | 3.71 | 0.84 | Weak (High Leverage) |
| Current Ratio | 1.13 | 2.49 | Neutral |
| ROA | 17.32% | -193380.00% (disorted) | Strong |
DOL.TO outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Dollarama Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
89.96%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
132.41%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
135.63%
Industry Style: Defensive, Dividend, Low Volatility
High Growth