Обзор Dycom Industries: internet connection and future dividends

TutorialComparator

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Community

TutorialComparator

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Community

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Investments

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Business

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Analysis of laws

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Spending diaries

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Calculators

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Travels

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Medicine and health

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Tests

Обзор Dycom Industries: подключение интернета и дивиденды будущего

PropertySee all

Investment fees21.1297

Обзор Dycom Industries: internet connection and future dividends

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Dycom Industries (NYSE: two) - American engineering company, telecommunications worker. The company's business is stable and may well start paying dividends. But the company's stock looks overbought.

When creating the material, sources were used, inaccessible to users from the Russian Federation. Hopefully, you know, what to do.

What do they make money on

According to the company's annual report, its revenue is formed from the following types of services:

  1. Engineering services. Telecommunications infrastructure planning and design.
  2. Construction, installation and maintenance. Actually, these are physical actions, usually following the design.

Unfortunately, not written in the report, what kind of occupation how much revenue the company brings and, what is equally important, what is the marginality of these activities. According to the types of clients and contracts, the revenue is divided as follows:

  • telecommunications - 89,1%. The company's customers are from the telecommunications industry;
  • engineering and design work for housing and communal services - 7,2%. In fact, same, as above, but in specific industry conditions;
  • construction and maintenance of electrical infrastructure- and gas supply - 3,7%.

The company operates only in the USA.

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Arguments in favor of the company

No reason to worry. According to the calculations of the company, by 2025 60% American households will be connected to fiber-optic internet - against 32% in 2020. The need of these same households for stable and strong Internet traffic is growing., so even if the Dycom business does not show eye-popping growth rates, it will remain fairly stable, what can attract many investors to these shares.

Yet again, I would not hope for a tenfold increase in the company's revenue and profits, but this will give her business stability and stability. As existing, Internet infrastructure that has not yet been built will require maintenance, and after a number of years - and reconstruction. It's all good for Dycom.

Biden's plan - Dycom wins. Also, the company's business will be facilitated by the presence of $ 65 billion in Biden's infrastructure plan to expand the access of the US population to the Internet.

There is a lot of work to be done here, so participation in these programs will bring Dycom a lot of benefits - since it has offices almost all over America, and she will take this opportunity.

  Two more (nearly) august apocalypse

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Relative cheapness. Company P / S less 1, and its capitalization is approximately $ 2.96 billion. This, in principle, makes it attractive for retail investors., and for potential buyers from among large telecommunications holdings.

Dividends. At the moment, the company does not pay dividends, but could. Quite possible, that soon some activist investor could buy a share in the company, which will require Dycom management to start paying dividends. for example, at level 2-3 $ per year - this is 2-3% per annum, which will amount to 60-80% of the company's profit. In terms of finance, this will be quite a feasible burden for the company.: Dycom has approximately $ 1.393 billion in debt, of which only 393.153 million need to be extinguished during the year. On the other hand, the potentially large size of payments of 2-3% per annum will make it possible to catch up with lovers of passive profitability into these shares..

it, sure, hypothetical possibility, but, in my opinion, there are prerequisites for that: the company's business is quite stable, but shareholders get practically nothing from this.

What can get in the way

Expensive. Company P / E - 68,91 - this is indecent a lot. This alone will make its stocks volatile.. After all, eventually, it’s just a business that is actually at the level of sysadmins or even plumbers with low margins - and the lack of prospects for its significant increase. Also, such a price will severely limit the potential premium to the purchase of the company - of course, when, if there is a buyer for it.

Concentration. According to the company's annual report, a huge percentage of her revenue is given by contracts with large clients: Verizon 18,8%, Lumen Technologies 16,9%, Comcast 16,7%, AT&T 16,7%.

Basically, the presence of such giants in the number of clients is a kind of plus: this will maintain the stability of Dycom's business. After all, all these companies need to maintain and expand their huge telecom infrastructure. But at the same time, their very size allows them to dictate prices to Dycom., that's why Dycom has such a low total margin: less 1,5% from proceeds.

Well, there are always theoretical risks., that some of the major clients will leave and this will affect the reporting of Dycom. Finally, she has a lot of competitors: Black Box, MasTec, Aegion, Michels, Rosendin Electric, Intren и Lamprell.

  Bundle of investment news: Evergrande, Ivan the Terrible and Merck

Dividends. The last 10 years the company has been actively spending on updating its own funds and expanding its business. Actually, that's why she didn't pay dividends. AND, possibly, therefore she will never pay dividends and will limit herself to buying back shares, no matter how scandalous the investor activists.

And without dividends, these shares do not look particularly interesting.. Yes, there is stability and growth prospects, but not very big.

It may also turn out, that Dycom will introduce dividends, but in a more modest form - something at the level of 0.5-1% per annum. In this case, I would not expect a significant influx of investors in these shares..

All the positive went down the drain. Over the past two years, the company's shares have risen by almost 100%, and this at the same time, that its revenue and profits did not increase. clear, what investors expect from Biden's infrastructure plan for the company, but these advantages are not realized soon and not immediately in full.

Now the company's shares look too expensive, because all the positive in the quotes is already included. When, if the benefits expected by investors are not realized soon or the result is more modest than expected, shares will shake.

Обзор Dycom Industries: подключение интернета и дивиденды будущего

Resume

At the moment, Dycom looks too expensive - all the positive in the stock has already been incorporated. So I would expect the quotes to fall somewhere to the level 60 $. And if I invested in these stocks now, then only with an eye to that, that the company will be attacked by an activist investor, requiring dividends.

Scroll up