Today, we take a deep dive into the intrinsic value of DuPont de Nemours Inc (DD, Financial), a diversified global specialty chemicals company. With a daily loss of 8.18%, a 3-month loss of 12.82%, and an Earnings Per Share (EPS) (EPS) of 9.69, is this stock modestly undervalued? Our analysis aims to answer this question.
Company Overview
DuPont de Nemours was created in 2019, following the DowDuPont merger and subsequent separations. The company specializes in the production of patented specialty chemicals and downstream products. Its portfolio serves various industries, including electronics and communication, automotive, construction, safety and protection, and water management. Noteworthy products include Kevlar, Tyvek, and Nomex.
Understanding GF Value
The GF Value is a proprietary measure that helps determine the intrinsic value of a stock. It's calculated based on historical trading multiples, an adjustment factor from GuruFocus based on past performance and growth, and future business performance estimates. This value provides an ideal fair trading price for the stock.
According to GuruFocus' valuation method, DuPont de Nemours (DD, Financial) appears to be modestly undervalued. The GF Value Line, which represents the stock's fair value, is calculated based on historical multiples, an internal adjustment based on past business growth, and analyst estimates of future business performance. If the share price is significantly above the GF Value Line, the stock may be overvalued and have poor future returns. Conversely, if the share price is significantly below the GF Value Line, the stock may be undervalued and have higher future returns. At its current price of $66.92 per share, DuPont de Nemours stock appears to be modestly undervalued.
As DuPont de Nemours is relatively undervalued, the long-term return of its stock is likely to be higher than its business growth. Interested in companies that may deliver higher future returns at reduced risk? Check out these companies.
Financial Strength
Investing in companies with poor financial strength can lead to a high risk of permanent capital loss. To avoid this, it's essential to review a company's financial strength before purchasing shares. DuPont de Nemours has a cash-to-debt ratio of 0.61, ranking worse than 53.48% of companies in the Chemicals industry. With an overall financial strength score of 6 out of 10, DuPont de Nemours' financial strength is fair.
Profitability and Growth
Investing in profitable companies carries less risk, especially those with consistent profitability over the long term. DuPont de Nemours has been profitable 9 years over the past 10 years. The company had revenues of $12.50 billion and an Earnings Per Share (EPS) (EPS) of $9.69 in the past 12 months. Its operating margin of 15.16% is better than 81.67% of companies in the Chemicals industry. Overall, GuruFocus ranks DuPont de Nemours's profitability as fair.
Growth is a crucial factor in a company's valuation. The 3-year average annual revenue growth rate of DuPont de Nemours is 8%, ranking worse than 55.35% of companies in the Chemicals industry. The 3-year average EBITDA growth rate is 7.7%, ranking worse than 54.55% of companies in the Chemicals industry.
ROIC vs WACC
Comparing a company's Return on Invested Capital (ROIC) to its Weighted Average Cost of Capital (WACC) can also help evaluate its profitability. In the past 12 months, DuPont de Nemours's ROIC was 3.84, while its WACC came in at 9.81. This indicates that the company is creating value for shareholders.
Conclusion
In conclusion, the stock of DuPont de Nemours (DD, Financial) appears to be modestly undervalued. The company's financial condition is fair, and its profitability is fair. However, its growth ranks worse than 54.55% of companies in the Chemicals industry. To learn more about DuPont de Nemours stock, check out its 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
