As of May 22, 2025, Doman Building Materials Group Ltd's estimated intrinsic value ranges from $6.22 to $111.24 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $111.24 | +1225.9% |
| Discounted Cash Flow (5Y) | $60.56 | +621.8% |
| Dividend Discount Model (Multi-Stage) | $33.83 | +303.2% |
| Dividend Discount Model (Stable) | $6.22 | -25.9% |
| Earnings Power Value | $23.34 | +178.1% |
Is Doman Building Materials Group Ltd (DBM.TO) undervalued or overvalued?
With the current market price at $8.39, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Doman Building Materials Group Ltd's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.22 | 1.41 |
| Cost of equity | 9.4% | 12.7% |
| Cost of debt | 4.8% | 5.4% |
| Tax rate | 17.5% | 21.4% |
| Debt/Equity ratio | 1.54 | 1.54 |
| After-tax WACC | 6.1% | 7.6% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $61 | $6,422M | 82.5% |
| 10-Year Growth | $111 | $10,852M | 71.4% |
| 5-Year EBITDA | $32 | $3,958M | 71.7% |
| 10-Year EBITDA | $64 | $6,680M | 53.5% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $214M |
| Discount Rate (WACC) | 7.6% - 6.1% |
| Enterprise Value | $2,822M - $3,515M |
| Net Debt | $1,129M |
| Equity Value | $1,693M - $2,386M |
| Outstanding Shares | 87M |
| Fair Value | $19 - $27 |
| Selected Fair Value | $23.34 |
| Metric | Value |
|---|---|
| Market Capitalization | $733M |
| Enterprise Value | $1862M |
| Trailing P/E | 13.53 |
| Forward P/E | 6.77 |
| Trailing EV/EBITDA | 7.05 |
| Current Dividend Yield | 656.99% |
| Dividend Growth Rate (5Y) | 3.83% |
| Debt-to-Equity Ratio | 1.54 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $33.37 |
| Discounted Cash Flow (5Y) | 25% | $15.14 |
| Dividend Discount Model (Multi-Stage) | 20% | $6.77 |
| Dividend Discount Model (Stable) | 15% | $0.93 |
| Earnings Power Value | 10% | $2.33 |
| Weighted Average | 100% | $58.54 |
Based on our comprehensive valuation analysis, Doman Building Materials Group Ltd's weighted average intrinsic value is $58.54, which is approximately 597.8% above the current market price of $8.39.
Key investment considerations:
Given these factors, we believe Doman Building Materials Group Ltd is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.