Last update on 2024-06-04

DIeteren Group (DJDA.F) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

In-depth Piotroski F-Score analysis of DIeteren Group (DJDA.F) for 2023. Comprehensive evaluation based on financial strength with a final score of 8/9.

Short Analysis - Piotroski Score: 8

We're running DIeteren Group (DJDA.F) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score is a system that evaluates a company's financial health and potential as a strong, undervalued investment based on 9 criteria. DIeteren Group (DJDA.F) has an impressive Piotroski score of 8 out of 9, suggesting a robust financial position. For profitability, the company reported a positive net income of €504.7 million for 2023, positive operating cash flow of €436.9 million, and an increasing Return on Assets (ROA). Additionally, the company has a declining leverage ratio, a growing current ratio, and a decrease in outstanding shares, indicating no dilution. Although the operating cash flow is lower than net income, the consistent growth in gross margin and asset turnover secures DIeteren Group a high score.

Insights for Value Investors Seeking Stable Income

Based on the detailed analysis, DIeteren Group (DJDA.F) appears to be financially solid and shows consistent positive trends in key areas. With an 8 out of 9 Piotroski score, it suggests the company is efficient, profitable, and less reliant on debt. This score is promising for potential investors looking for stable and possibly undervalued stocks. Therefore, it is worth considering DIeteren Group for further investment research and monitoring closely.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of DIeteren Group (DJDA.F)

Company has a positive net income?

Net income assesses a company's profitability after all expenses, taxes, and costs have been deducted from total revenue. A positive net income indicates good financial health.

D'Ieteren Group (DJDA.F) reported a net income of €504.7 million in 2023, which is positive. Over the last 20 years, the net income has generally trended upwards with notable fluctuations, including significant rises to €376 million in 2011 and €1.048 billion in 2018, as well as negative figures in 2008 and 2014. The 2023 net income places the company in a strong financial position, reflecting overall profitability and the ability to generate surplus value for shareholders. Given the positive net income, a point is added according to the Piotroski criterion.

Company has a positive cash flow?

Cash Flow from Operations (CFO) evaluates the actual cash inflow and outflow from regular business operations. Positive operating cash flow is crucial as it indicates that the business generates enough cash to maintain and grow its operations without relying on external funding.

In 2023, DIeteren Group (DJDA.F) reported a CFO of €436.9 million, which is positive. Over the past 20 years, the company has shown fluctuations in CFO, with certain years (e.g., 2018, 2019) indicating significantly lower or even negative cash flow. Nonetheless, the positive value in 2023 adds 1 point to the Piotroski Score, signifying a potentially positive outlook in terms of operating efficiency and liquidity. This trend is good as it shows a significant increase compared to previous years, especially 2019's -€27.4 million and 2020's €49.2 million.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) measures the increase or decrease in profitability relative to the company's assets. A rising ROA is generally favorable as it suggests improving efficiency in utilizing assets to generate earnings.

In 2023, DIeteren Group's ROA increased to 0.0741 from 0.0647 in 2022, hence adding 1 point. This improvement indicates better asset utilization and profitability. Over the last 20 years, DIeteren's ROA has varied, peaking at significant highs, but it remained lower than the industry median ROA consistently, which clocked at 0.1862 in 2023. Though the rise in ROA in 2023 is a positive signal, it is essential to work on narrowing the performance gap with industry benchmarks.

Operating Cashflow are higher than Netincome?

This criterion looks at whether the Operating Cash Flow is higher than Net Income.

For the DIeteren Group (DJDA.F) in 2023, the Operating Cash Flow is 436,900,000, which is lower than the Net Income of 504,700,000—a metric that does not fulfill this specific criterion. This leads to a score of 0 points. Comparing long-term data, however, provides context—Operating Cash Flow has generally been a mixed bag, showing both positive and negative trends over the past 20 years. The lower cash flow relative to net income might suggest higher non-cash accruals, temporarily inflating earnings. Specifically, the year 2023 has an accrual ratio of 0.0606, which aligns with this analysis. These factors need close monitoring as they could indicate potential red flags in financial reporting.

Liquidity of DIeteren Group (DJDA.F)

Leverage is declining?

Change in Leverage assesses a company's reliance on debt compared to equity. Lower leverage typically indicates reduced financial risk.

In 2022, D'Ieteren Group's leverage ratio was 0.1921, while in 2023, the leverage ratio decreased slightly to 0.1769. This marginal decrease in leverage is positive, suggesting the company is reducing its reliance on debt financing. Over the past two decades, the leverage has mostly remained low, with some notable spikes such as in 2014 (0.21) and 2022 (0.1921). The recent reduction aligns with a long-term trend of maintaining low leverage, adding 1 point to the Piotroski score for this criterion.

Current Ratio is growing?

Current Ratio measures a company's ability to pay short-term liabilities with short-term assets. A higher Current Ratio suggests stronger liquidity and financial health.

The Current Ratio for DIeteren Group (DJDA.F) increased slightly from 1.7747 in 2022 to 1.7954 in 2023, indicating a positive trend. This improvement, despite being modest, demonstrates a slight enhancement in the company's liquidity position. Historically, DIeteren has exhibited fluctuating Current Ratios, with significant increases around 2018-2020 but a sharp decline thereafter until the Current Ratio stabilized again in the last couple of years. Compared to the industry median of 1.1692 for 2023, DIeteren Group's Current Ratio stands out positively, reflecting better liquidity management relative to its peers. Therefore, for the Piotroski Score, this criterion should receive 1 point due to the improvement in the Current Ratio from 2022 to 2023.

Number of shares not diluted?

Change in shares outstanding is essential as it impacts earnings per share (EPS) and ownership dilution.

In 2023, the Dieteren Group had outstanding shares of 53,021,486 compared to 53,230,995 in 2022, a decrease of 209,509 shares (-0.4%). This trend is positive as it often indicates share buybacks, which can increase EPS and signal management’s confidence in the company’s future prospects.

Operating of DIeteren Group (DJDA.F)

Cross Margin is growing?

Gross Margin represents the percentage of revenue that exceeds a company's cost of goods sold, indicating financial health. An increase suggests better efficiency.

In 2023, the Gross Margin of DIeteren Group was 0.2262, an improvement from 0.2059 in 2022, showing a positive trend. This indicates an increase in efficiency and profitability, scoring 1 point for this criterion. Compared to the industry median Gross Margin of 0.1862 in 2023, DIeteren Group is also outpacing its industry, further highlighting this positive development. Historically, this margin has fluctuated significantly, but the recent uptick provides an optimistic outlook.

Asset Turnover Ratio is growing?

Change in asset turnover reflects a company’s ability to generate sales from its asset base year-over-year. It’s crucial because it assesses efficiency.

The asset turnover for DIeteren Group has increased from 0.9165 in 2022 to 1.172 in 2023, which signifies an improvement in efficiency. This trend is favorable for the company as it suggests better utilization of its assets to generate sales. Over the last 20 years, the company's asset turnover ratio has seen considerable fluctuations, with peaks around the mid-2010s. The increase from 2022 to 2023 fits within its historical volatility, marking a positive development worthy of 1 point in the Piotroski Analysis.