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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 Building Materials' Q2 2025 Earnings: Strong Performance Amidst Challenges

Doman Building Materials Group Limited reported a robust second quarter 2025, with revenue reaching $886.7 million, a 28.5% year-over-year increase. Gross margin was $142.7 million, up 16.1%, and EBITDA rose 59.5% to $80 million. Net earnings reached $27.7 million, a $10.7 million increase from the prior year. Earnings per share (EPS) came in at $0.3165, beating estimates of $0.2088. The strong performance was attributed to the company's margin enhancement strategies and the acquisition of Doman Tucker Lumber.

Publication Date: Sep -04

📋 Highlights
  • Revenue Surge:: Q2 2025 revenue hit $886.7M, +28.5% YoY, driven by Doman Tucker Lumber acquisition.
  • Gross Margin Growth:: Gross profit rose to $142.7M (+16.1%), despite market challenges like high mortgage rates.
  • EBITDA Expansion:: EBITDA surged 59.5% to $80M, with net earnings reaching $27.7M (+$10.7M YoY).
  • Debt Reduction Strategy:: Aims to cut leverage to low 4s/3s within 18 months via free cash flow generation.
  • Capital Expenditures:: 2023 CAPEX budget set at $20–22M for upgrades and maintenance to boost efficiency.

Operational Highlights

Despite a challenging market environment characterized by high mortgage rates and trade uncertainty, Doman maintained strong margins and saw moderate consumer activity. The company is focusing on cost management and growth opportunities, aiming to reduce leverage to the low 4s and then the 3s within 18 months through free cash flow generation. As stated by the company, "our margin enhancement strategies and the addition of Doman Tucker Lumber have been key drivers of our success."

Cost-Saving Initiatives and Growth Opportunities

Doman is implementing various cost-saving initiatives, including the acquisition of software and transitioning to third-party carriers. These measures are reducing insurance costs and liability while maximizing freight efficiency. The company is also investing in automation to increase fence production efficiency at its Gilmer, Texas mill, anticipating potential fencing shortages in the U.S. due to tariffs on South American imports.

Valuation and Outlook

With a P/E Ratio of 11.49, P/B Ratio of 1.37, and EV/EBITDA of 8.25, the market appears to have priced in a moderate growth trajectory for Doman. The company's ROE of 11.62% and ROIC of 7.32% indicate a decent return on equity and invested capital. Analysts estimate next year's revenue growth at 5.3%. The company's dividend yield stands at 5.76%, providing a relatively attractive return for income investors.

Challenges Ahead

Doman anticipates ongoing trade tensions, particularly the softwood lumber dispute, to remain a challenge for Canadian sawmill producers. The company is cautious about inventory positioning across the industry, characterized by cautious buying behavior. Planned capital expenditures for 2023 are estimated between $20 million and $22 million, encompassing sawmill upgrades and maintenance activities.

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
Westlake Chemical Partners

A-Score: 7.3/10

Value: 9.2

Growth: 3.1

Quality: 7.5

Yield: 10.0

Momentum: 4.0

Volatility: 10.0

1-Year Total Return ->

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Vicat

A-Score: 7.1/10

Value: 7.9

Growth: 6.1

Quality: 4.8

Yield: 6.9

Momentum: 9.5

Volatility: 7.3

1-Year Total Return ->

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Doman

A-Score: 6.9/10

Value: 8.1

Growth: 5.7

Quality: 4.5

Yield: 10.0

Momentum: 5.0

Volatility: 8.3

1-Year Total Return ->

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US Lime & Minerals

A-Score: 5.3/10

Value: 1.6

Growth: 8.2

Quality: 8.5

Yield: 0.0

Momentum: 8.0

Volatility: 5.7

1-Year Total Return ->

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Boise Cascade

A-Score: 5.1/10

Value: 6.8

Growth: 5.8

Quality: 5.6

Yield: 6.0

Momentum: 0.5

Volatility: 6.0

1-Year Total Return ->

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Smith-Midland

A-Score: 4.3/10

Value: 3.1

Growth: 6.8

Quality: 7.1

Yield: 0.0

Momentum: 6.5

Volatility: 2.3

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

8.76$

Current Price

8.76$

Potential

-0.00%

Expected Cash-Flows