Critical Review: Dollarama (DLMAF) vs. Its Peers

Dollarama (OTCMKTS:DLMAF) is one of 142 public companies in the “Broadline Retail” industry, but how does it compare to its competitors? We will compare Dollarama to similar companies based on the strength of its analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.

Dividends

Dollarama pays an annual dividend of $0.34 per share and has a dividend yield of 0.2%. Dollarama pays out 12.9% of its earnings in the form of a dividend. As a group, “Broadline Retail” companies pay a dividend yield of 30.5% and pay out 11.5% of their earnings in the form of a dividend. Dollarama lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Valuation & Earnings

This table compares Dollarama and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Dollarama	$5.21 billion	$940.70 million	52.19
Dollarama Competitors	$50.33 billion	$1.73 billion	-222.44

Dollarama’s competitors have higher revenue and earnings than Dollarama. Dollarama is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Institutional and Insider Ownership

44.5% of shares of all “Broadline Retail” companies are held by institutional investors. 24.0% of shares of all “Broadline Retail” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Dollarama and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dollarama	17.65%	94.77%	17.12%
Dollarama Competitors	-3.13%	-18.30%	-1.26%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Dollarama and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dollarama	0	4	5	4	3.00
Dollarama Competitors	1350	5301	10679	294	2.56

As a group, “Broadline Retail” companies have a potential upside of 12.45%. Given Dollarama’s competitors higher probable upside, analysts clearly believe Dollarama has less favorable growth aspects than its competitors.

Summary

Dollarama competitors beat Dollarama on 8 of the 14 factors compared.

About Dollarama

Dollarama Inc. operates a chain of dollar stores in Canada. Its stores offer general merchandise, consumables, and seasonal products. It also sells its products through online store. The company was formerly known as Dollarama Capital Corporation and changed its name to Dollarama Inc. in September 2009. Dollarama Inc. was founded in 1992 and is headquartered in Mount Royal, Canada.