
TSE:DBM
This summary was created by AI, based on 3 opinions in the last 12 months.
Doman Building Materials Group Ltd. (DBM-T) has attracted positive attention from several financial experts due to its robust performance in the building materials sector. The company is noted for its strong dividend yield ranging between 4.5% to 5.82%, indicating a solid return for income-focused investors. As a distribution-centric player, it operates in a midstream capacity, which allows it to mitigate some of the volatile price risks associated with lumber. Experts believe that Doman's business model, which includes significant relationships with major customers like Lowe's, positions it well for consistent growth, especially given its 20% market share in the U.S. The potential for future acquisitions appears promising, further strengthening cash flows and the opportunity for increased dividends as debt is managed effectively. With an average analyst price target of $10.93, the outlook remains optimistic for this company.
His pick today for an income focus. An analogy would be the way the mid-streamer Pembina operates. It buys lumber from the forestry companies and delivers it to the end retailer, treats it, or cuts it down. So it doesn't take on a lot of the volatile price risk; more of a margin and volume business.
Has been a leader in Canada, but now has about 20% market share in the US. More volume means it gets more efficient and can take more market share. Will be a growth through acquisition story -- use some debt, lever it up, pay the debt off, and the acquisition feeds the cashflow. Yield is 5.82%, with actual free cashflow yield closer to 10-15%. Lots of room for dividend to increase once debt is paid down a bit.
Sawmills and other building material sites in Canada and US. Building out larger US presence through acquisition. Earnings were fine, but stock dropped. Revenue far below expectations, but cashflow in line. Great job managing inventory and cash to pay dividend. Homebuilding should remain strong. He's looking to top up his position.
DBM operates as a wholesale distributor of building materials and home renovation products, and is now trading at 8.9x times' Forward P/E. In the last five years, growth was solid around 16% (one large acquisition in 2021), DBM recently experienced a revenue decline for the first time in many years; trailing twelve-month revenue declined around -13% compared to FY2022. The balance sheet is leveraged with net debt of $725M, and net debt/EBITDA is around 4.2x. Overall, a very cheap stock, but the leverage profile is still a possible concern, especially for a cyclical downturn (if interest rates and inflation remain challenging). For a cyclical name, we would be more comfortable waiting till the leverage level get down to a more sustainable level. Its small size also adds some risk, and based on consensus earnings are expected to be flat next year.
Unlock Premium - Try 5i Free
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Recent reported EPS and revenues missed estimates. A sharp rise in materials prices were pointed as reasons. Sales increased by 83.3%, partially due to acquisitions and the rest due to materials pricing. The equity position has increased significantly. The company’s financials are in pretty good shape and continue to grow top and bottom lines. Unlock Premium - Try 5i Free
Doman Building Materials Group Ltd. is a Canadian stock, trading under the symbol DBM.TO (previously DBM-T on Stockchase) on the Toronto Stock Exchange (DBM-CT). It is usually referred to as TSX:DBM or DBM.TO
In the last year, 2 stock analysts published opinions about DBM.TO (previously DBM-T on Stockchase). 2 analysts recommended to BUY the stock. 0 analysts recommended to SELL the stock. The latest stock analyst recommendation is BUY. Read the latest stock experts' ratings for Doman Building Materials Group Ltd..
Doman Building Materials Group Ltd. was recommended as a Top Pick by Stockchase Insights on 2021-08-18. Read the latest stock experts ratings for Doman Building Materials Group Ltd..
Earnings reports or recent company news can cause the stock price to drop. Read stock experts' recommendations for help on deciding if you should buy, sell or hold the stock.
2 stock analysts on Stockchase covered Doman Building Materials Group Ltd. in the last year. It is a trending stock that is worth watching.
On 2026-05-29, Doman Building Materials Group Ltd. (DBM.TO) stock closed at a price of $10.54.
The stock price has out-performed others in the sector and it pays a 4 1/2 to 5% dividend. It is well run, and as more of a distribution company is considered midstream in the industry. He is looking for $15.