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1. Company Snapshot

1.a. Company Description

Doman Building Materials Group Ltd.distributes building materials and related products in Canada, the United States, and Hawai.It distributes a range of building materials, lumber, renovation, and electrical products.


The company owns approximately 117,000 acres of private timberlands, and strategic licenses and tenures.It is also involved in log harvesting and trucking, and post and pole peeling activities; and provision of pressure-treating services for specialty wood production plants.The company was formerly known as CanWel Building Materials Group Ltd.


and changed its name to Doman Building Materials Group Ltd.in May 2021.Doman Building Materials Group Ltd.


was founded in 1989 and is headquartered in Vancouver, Canada.

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1.b. Last Insights on DBM

Doman Building Materials Group's recent performance was driven by an EPS miss in its Full Year 2024 earnings, despite a 6.9% revenue increase to CA$2.66b. The company's gross margin remained steady at 16%, but its adjusted EBITDA of CA$195.5m fell short of expectations. Additionally, the company's dividend of CA$0.14 per share, affirmed in December 2024, does not seem to have provided significant support to the stock.

1.c. Company Highlights

2. Doman's Strong Q4 Performance and Future Outlook

Publication Date: Mar -09

📋 Highlights
  • Full-Year Revenue & Profit Metrics:: 2025 revenue hit $3.12 billion, with gross margin of $505.5M, EBITDA of $256.4M, and net earnings of $80.3M.
  • Q4 Performance:: Fourth-quarter revenue reached $644 million, supported by 16.6% gross margin and $44.3M EBITDA.
  • Margin Enhancement Strategies:: Lumber price dips and freight optimization drove margin stability, with CapEx in Q4 reaching a high-water mark.
  • Fencing Business Growth:: Investments in automation and new equipment aim to boost capacity, targeting 1st in US fence production within 2 years.
  • Debt Reduction & M&A Focus:: Debt reduction and disciplined M&A (sticking to valuation range) remain priorities, with Electrical division as a key growth area.

Operational Highlights

Amar Doman, Chairman and CEO, attributed the company's success to its strategic lumber buying efforts, which helped protect margins during market price dips. Additionally, freight optimization strategies played a significant role in margin enhancements, as highlighted by James Code, the CFO. The company's focus on upgrading its sawmill equipment, including investments in new fencing equipment, is expected to drive future growth.

Capital Expenditures and M&A

The company invested significantly in its fencing business, including new equipment and automation, aiming to increase efficiency and capacity. Doman expects the business to be busier this year due to a heavier hurricane season. The company remains disciplined in its M&A approach, sticking to its valuation range, with a focus on strategic acquisitions to fill gaps in its market presence.

Valuation and Outlook

With a P/E ratio of 10.75, the company's valuation appears reasonable, considering its growth prospects. The EV/EBITDA ratio of 7.26 also suggests a relatively attractive valuation. Analysts estimate revenue growth of 6.6% for the next year. The company's focus on growing its value-added services, including fencing and manufacturing, is expected to drive future growth. With a dividend yield of 5.69%, the stock offers an attractive return.

Growth Prospects

Doman believes that the worst is behind the North American residential housing market, with interest rates expected to decline, leading to increased activity. The company's Electrical division is also expected to drive growth, with the Temecula acquisition being a key growth area. The fencing business, which currently accounts for 5-10% of the company's product mix, is rapidly growing, with plans to expand domestic production capacity to meet demand.

3. NewsRoom

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TSX Closer: Up More Than 500 Pts As Gold and Silver Shine, and Desjardins Plays Down Impact of Latest Targeted U.S. Tariffs

Oct -14

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Doman Building Materials Group (TSE:DBM) Has Announced A Dividend Of CA$0.14

Sep -18

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Doman Building Materials Group Maintained at Buy at Stifel Canada; Price Target Kept at C$12.00

Sep -16

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Doman Building Materials Group Second Quarter 2025 Earnings: EPS: CA$0.32 (vs CA$0.20 in 2Q 2024)

Aug -09

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Doman Building Materials Group Second-quarter Adjusted Earnings, Revenue, Advance

Aug -06

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Doman Building Materials Group Ltd. Announces Second Quarter 2025 Financial Results

Aug -06

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Is There Now An Opportunity In Doman Building Materials Group Ltd. (TSE:DBM)?

Jun -30

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Is Doman Building Materials Group Ltd. (TSE:DBM) Trading At A 36% Discount?

May -27

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.65%)

6. Segments

Building Materials

Expected Growth: 4.65%

Doman Building Materials Group Ltd.'s 4.65% growth in Building Materials is driven by increasing demand for renovation and new construction projects, fueled by low interest rates and government incentives. Additionally, the company's strategic expansion into new markets, product diversification, and operational efficiencies have contributed to its growth momentum.

Other

Expected Growth: 4.83%

The 4.83% growth of Other from Doman Building Materials Group Ltd. is driven by increasing demand for specialty building products, expansion into new geographic markets, and strategic acquisitions. Additionally, the company's focus on sustainable and eco-friendly products has resonated with environmentally conscious consumers, contributing to its growth momentum.

7. Detailed Products

Lumber

Doman Building Materials Group Ltd. offers a wide range of lumber products, including dimensional lumber, engineered wood products, and specialty lumber for various construction and renovation projects.

Building Envelope

The company provides a variety of building envelope products, including roofing, siding, and exterior finishing materials for weather-tight and energy-efficient building solutions.

Engineered Wood Products

Doman Building Materials Group Ltd. offers engineered wood products, such as glue-laminated timber, laminated veneer lumber, and oriented strand board, for structural and non-structural applications.

Millwork

The company provides a range of millwork products, including doors, windows, mouldings, and staircases, for interior and exterior applications.

Roofing and Insulation

Doman Building Materials Group Ltd. offers a variety of roofing and insulation products, including shingles, underlayment, and insulation materials, for energy-efficient and weather-tight roofing solutions.

Drywall and Ceiling

The company provides drywall and ceiling products, including gypsum boards, joint compounds, and ceiling tiles, for interior finishing applications.

Exterior Finishing

Doman Building Materials Group Ltd. offers exterior finishing products, including siding, trim, and exterior mouldings, for exterior design and weather protection.

8. Doman Building Materials Group Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Doman Building Materials Group Ltd. is medium due to the availability of alternative materials and products in the market.

Bargaining Power Of Customers

The bargaining power of customers for Doman Building Materials Group Ltd. is low due to the company's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Doman Building Materials Group Ltd. is medium due to the company's dependence on a few key suppliers for raw materials.

Threat Of New Entrants

The threat of new entrants for Doman Building Materials Group Ltd. is high due to the relatively low barriers to entry in the industry.

Intensity Of Rivalry

The intensity of rivalry for Doman Building Materials Group Ltd. is high due to the competitive nature of the industry and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 54.11%
Debt Cost 6.39%
Equity Weight 45.89%
Equity Cost 11.85%
WACC 8.89%
Leverage 117.92%

11. Quality Control: Doman Building Materials Group Ltd. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Doman

A-Score: 7.1/10

Value: 8.5

Growth: 5.7

Quality: 5.2

Yield: 10.0

Momentum: 5.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Vicat

A-Score: 7.0/10

Value: 7.4

Growth: 6.1

Quality: 4.8

Yield: 6.9

Momentum: 10.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Westlake Chemical Partners

A-Score: 6.7/10

Value: 8.6

Growth: 3.1

Quality: 6.5

Yield: 10.0

Momentum: 2.0

Volatility: 10.0

1-Year Total Return ->

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Boise Cascade

A-Score: 5.1/10

Value: 6.9

Growth: 5.8

Quality: 5.4

Yield: 6.0

Momentum: 0.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
US Lime & Minerals

A-Score: 4.6/10

Value: 1.8

Growth: 8.2

Quality: 8.4

Yield: 0.0

Momentum: 3.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Smith-Midland

A-Score: 3.7/10

Value: 3.9

Growth: 6.8

Quality: 6.0

Yield: 0.0

Momentum: 2.5

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.59$

Current Price

9.59$

Potential

-0.00%

Expected Cash-Flows