Dxp Enterprises Inc

DXPE

Wholesale-Industrial Machinery & Equipment

Mkt Cap

$790.7M

PE

12.66

Debt

$552.8M

Cash

$139.8M

EV

$1.204B

FCF

$95.41M

Market Cap

$790.7M

P/E Ratio

12.66

Debt

$552.8M

Cash

$139.8M

EV

$1.204B

FCF

$95.41M

Charts data: {"Earnings":[{"time":"2014-12-30","value":-45328000},{"time":"2015-12-30","value":-39070000},{"time":"2016-12-30","value":7151000},{"time":"2017-12-30","value":16529000},{"time":"2018-12-30","value":35521000},{"time":"2019-12-30","value":35775000},{"time":"2020-12-30","value":-29074000},{"time":"2021-12-30","value":15751000},{"time":"2022-12-30","value":48065000},{"time":"2023-12-30","value":68722000}],"Sales":[{"time":"2014-12-30","value":1499662000},{"time":"2015-12-30","value":1247043000},{"time":"2016-12-30","value":962092000},{"time":"2017-12-30","value":1006782000},{"time":"2018-12-30","value":1216197000},{"time":"2019-12-30","value":1267189000},{"time":"2020-12-30","value":1005266000},{"time":"2021-12-30","value":1113921000},{"time":"2022-12-30","value":1480832000},{"time":"2023-12-30","value":1678600000}],"Net Margins":[{"time":"2014-12-30","value":-0.030225477474257533},{"time":"2015-12-30","value":-0.031330114518905924},{"time":"2016-12-30","value":0.007432761108085297},{"time":"2017-12-30","value":0.016417655460665766},{"time":"2018-12-30","value":0.029206617020104474},{"time":"2019-12-30","value":0.02823177915843651},{"time":"2020-12-30","value":-0.028921698336559675},{"time":"2021-12-30","value":0.014140140997431595},{"time":"2022-12-30","value":0.03245810463307114},{"time":"2023-12-30","value":0.04094006910520672}],"Assets":[{"time":"2014-12-30","value":844346000},{"time":"2015-12-30","value":683980000},{"time":"2016-12-30","value":611525000},{"time":"2017-12-30","value":639083000},{"time":"2018-12-30","value":699962000},{"time":"2019-12-30","value":788220000},{"time":"2020-12-30","value":851861000},{"time":"2021-12-30","value":906192000},{"time":"2022-12-30","value":1037280000},{"time":"2023-12-30","value":1177436000}],"Stockholders Equity":[{"time":"2014-12-30","value":242952000},{"time":"2015-12-30","value":198870000},{"time":"2016-12-30","value":252549000},{"time":"2017-12-30","value":268546000},{"time":"2018-12-30","value":308254000},{"time":"2019-12-30","value":344948000},{"time":"2020-12-30","value":347866000},{"time":"2021-12-30","value":358692000},{"time":"2022-12-30","value":365392000},{"time":"2023-12-30","value":380879000}],"ROE":[{"time":"2014-12-30","value":-0.18657183311929929},{"time":"2015-12-30","value":-0.1964599989943179},{"time":"2016-12-30","value":0.028315297229448543},{"time":"2017-12-30","value":0.06154997654033201},{"time":"2018-12-30","value":0.11523289235500593},{"time":"2019-12-30","value":0.10371128401962035},{"time":"2020-12-30","value":-0.08357815940620814},{"time":"2021-12-30","value":0.043912325895196995},{"time":"2022-12-30","value":0.1315436572229277},{"time":"2023-12-30","value":0.18043000532977665}],"ROA":[{"time":"2014-12-30","value":-0.014955954075698824},{"time":"2015-12-30","value":-0.040814058890610835},{"time":"2016-12-30","value":0.03161277135031274},{"time":"2017-12-30","value":0.05240320897285642},{"time":"2018-12-30","value":0.09779245159022919},{"time":"2019-12-30","value":0.08388774707568952},{"time":"2020-12-30","value":-0.03154270473704043},{"time":"2021-12-30","value":0.04398295284001624},{"time":"2022-12-30","value":0.09423877834335956},{"time":"2023-12-30","value":0.11781701935391818}]}

DXP Enterprises, Inc., together with its subsidiaries, engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services in the United States and Canada. It operates through three segments: Service Centers (SC), Supply Chain Services (SCS), and Innovative Pumping Solutions (IPS). The SC segment offers MRO products, equipment, and integrated services, including technical expertise and logistics services. It offers a range of MRO products in the rotating equipment, bearing, power transmission, hose, fluid power, metal working, fastener, industrial supply, safety products, and safety services categories. This segment serves customers in the oil and gas, food and beverage, petrochemical, transportation, other general industrial, mining, construction, chemical, municipal, agriculture, and pulp and paper industries. The SCS segment manages procurement and inventory management solutions; and offers outsourced MRO solutions for sourcing MRO products, including inventory optimization and management, store room management, transaction consolidation and control, vendor oversight and procurement cost optimization, productivity improvement, and customized reporting services. Its programs include SmartAgreement, a procurement solution for various MRO categories; SmartBuy, an on-site or centralized MRO procurement solution; SmartSource, an on-site procurement and storeroom management solution; SmartStore, an e-Catalog solution; SmartVend, an industrial dispensing solution; and SmartServ, an integrated service pump solution. The IPS segment fabricates and assembles custom-made pump packages; remanufactures pumps; and manufactures branded private label pumps. The company was founded in 1908 and is based in Houston, Texas.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
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3/31/22
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3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Dxp Enterprises Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$95.41M	$88.99M	$83M	$77.42M	$72.21M	$67.35M	$62.82M	$58.6M	$54.65M	$50.98M	$47.55M	$475.5M
DCF		$77.38M	$62.76M	$50.9M	$41.29M	$33.49M	$27.16M	$22.03M	$17.87M	$14.49M	$11.75M	$117.5M
Value	$476.7M

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 19%

Earnings Stability 18%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	-3.1%	0.74%	1.6%	2.9%	2.8%	-2.9%	1.4%	3.2%	4.1%	3.7%
ROA	-4.1%	3.2%	5.2%	9.8%	8.4%	-3.2%	4.4%	9.4%	12%	11%
ROE	-20%	2.8%	6.2%	12%	10%	-8.4%	4.4%	13%	18%	17%

What is the average Net Margin?

The average Net Margin over the past 5 years is +1.93%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.33%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +6.77%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.59%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +8.19%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +1.53%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	4.72	6.36	26.25	9.07	12.40	3.30	10.61	442.23	5.90	5.79
Debt Equity	2.01	1.09	0.95	0.78	0.69	0.96	0.92	1.18	1.45	1.47
MIN
Graham Stability	-	-	-	-	100%	-99%	100%	100%	100%	-99%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 5.79.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 36.60.

What is the Graham’s Stability?

Graham’s Stability measure stands at -0.99.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	8.3%	6.7%	19%	13%	4.3%
Net Income	38%	14%	-	43%	0.53%
Stockholders Equity	6%	4.3%	3.1%	4.2%	-0.1%
FCF	12%	29%	-2.4%	9.5K%	640%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +6.66%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +4.32%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +14.11%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +0.53%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +4.32%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -0.1%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +28.79%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +636.14%.