Akcieatrhy (Akcieatrhy.cz)
Markets  |  January 17, 2013 13:52:30

Family Dollar Stores: fundamentání Analysis popular dollar investments


Family Dollar Stores (FDO) is one of the fastest growing discount store chains in the United States. The company has a policy to offer customers products with good functional characteristics in small format stores in neighborly. Historical chart since 1999 shows that the FDO stock market is currently valued correctly. Shares has a nice dividend yield and the expected growth in the range of 13.5% per year. However, an investor should do their own research and consider whether it is appropriate to take this investment opportunity or not.

Profits are correlated with the price of shares, as can be seen in the following chart. Orange line with triangles represents the historical earnings growth.
The black line represents the value of the share price, and we see that both of these values ??are correlated. On all graphs, we see that the two figures are parallel. If the price deviates from the line of profits, essentially returning to it over time.

Profits and share price are mutually correlated

A quick look at historical earnings and share price development shows that both values ??are correlated. Stocks FDO is currently due to gains evaluated correctly. Historical growth stocks is 13.5% per annum and PE = 14.9. Analysts future growth at 13%, which means that the shares are currently valued by the market correctly. (Price is on the orange line indicating further growth).

Family Dollar Stores: Historical profits, Price, Dividends and P / E since 1999

Performance tables Family Dollar Stores

The following graph shows the performance shares and dividends. It shows how historically appreciate income from shares and dividends. Payment of dividends is included in the total income, but dividends are not reinvested.

If we separate returns
Dividend income from shares, it becomes apparent that a dividend is a significant additional revenue derived from property shares. The overall evaluation of the corresponding 6.9% per annum (green oval), the initial amount of 1000 USD capital, dividends contribute the sum of $ 278.60 (blue highlight), which increases the yield from 6.9% to a total of 7.7% per year. In the same period, the index S & P 500 reviewed by only 2.6%.

Performance chart analysis

The following chart depicts the level of historical P / E (blue line) in relation to the values ??of ten-year government bonds U.S.. The current level of P / E is roughly the same amount as in 1999.

Chart Analysis 1

Another sign that the company is located in the area of ??good values ??can be shown on the graph present value P / S due to the historical value of P / S. The current value of P / S is now at a value of 0.68, which is the usual historical value.

Chart Analysis 2

The future development

Future long-term yields is entirely dependent on two major components:

First The historical growth curve of the company's profits
Second The price at which we purchase share , to be able to participate in those profits.

Predicting the growth of future profits, and the purchase of shares on the correct value of the principal criteria for a safe, prudent and profitable investment.

Graph estimated future profits of the company and the calculation of return is a simple but very effective tool that shows different possible scenarios and estimates of future development. Detailed view of these possible scenarios are another necessary step for judicious and prudent investment.

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Consensus of 26 leading analysts, the company that publishes Capital IQ assumes that Family Dollar Stores in the long run growth of 13% per year (orange circle). FDO has long-term debt of 27% and is at present P / E at 14.9. The value of P / E is currently correct. Levels of evaluation are indicated by five lines of orange with a peak P / E = 18 And based on the expected profit growth 13% per year. Price should be in 2018 reach $ 109.93, which shows brown circle in the chart of future returns. This represents a 13.8% annualized return, including dividends (yellow highlight above).

Graf return

Estimating future revenues

All companies derive their value from future revenues (quarterly earnings) which are able to generate their owners during its existence. Because the value of the company increases with increasing profits, we assume that the long term price will be close to the curve representing the future yield.

Given that each investor to invest in various instruments, it is appropriate to compare an investment in equities on its investment in less risky government bond. As shown in the following chart, comparing the investment in Family Dollar Stores with investment in the U.S. ten-year government bond would yield that investment in shares will be approximately 6 times more successful (purple oval) than equally large investment in ten-year government bond . This comparison is the basis for thinking about investing in the title.

Graph analysis views

Summary and Conclusions

This article presents a fundamental view of the past and present stock assessment, based on historical profits of which were published in accordance with the rules of the stock market. Outlook for the future is based on the consensus of analysts. Even though it is a glimpse of the fundamentals, the reader can make a fairly accurate picture of the company.
However, past performance is no guarantee of future performance, and readers should themselves carry out further analysis to ascertain whether the information in the article are sufficient or not.

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Family Dollar Stores: fundamentání analýza populární dolarové investice

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