This allows them to generate higher FCF. They are able to do this because of their strong brand equity among consumers.
But when you examine Dutch Lady, they are able to consistently generate increasing ROE without any debt. Except for a one-off drop individend per share has been on an increasing trend. In fact, we usually go deeper when we analyze a stock by using the investment process we developed for The Investment Quadrant.
Even if they are priced slightly higher, consumers still choose Dutch Lady. Dutch Lady has been able to do that for seven out of the past ten years.
Let us now move on to the 8 reasons why I love Dutch Lady Malaysia as an investment: The Business Dutch Lady is This reflects how strong their business model must be in order to generate such a high and consistent return on equity.
Most companies will see their net profit dip substantially but for Dutch Lady their profits were hardly affected at all. An earnings quality ratio of 1 means that a company collects a dollar in actual cash for every dollar of sales. Smaller companies usually have negative FCF because they had to keep spending on capital expenditure in order to expand the business.
But before I move onto the eight points, let me share a little bit more about the business of Dutch Lady. Pay dividends to shareholders Reinvest the cash in the business Acquire other businesses Execute share buybacks 4 High Return of Equity In my previous article on return on equity ROEcompanies are able to artificially boost their ROE through debt.
They achieved this due to management initiatives to operate a much leaner cost structure with lower operating costs. The objective is to look for companies with earnings quality ratio above 1.
With high positive FCF, a company is able to do the following activities to increase shareholder value: These two companies have always been compared apples-to-apples by investors.
Larger companies like Dutch Lady have already established their position in the marketplace and are at a more mature stage of the business cycle where high capital expenditure is no longer need.
The lower the CCC, the more efficient a company is at converting their inventory into cash fast. They manufacture and sell a range of dairy products and fruit juices like infant formula, condensed milk, powdered milk, sterilised milk, yogurt, fruit juices, etc.
Investing in small-cap companies can be risky because the growth stories may not always turn out as planned and flop. Hence, quality of earnings is very important. I decided to dive in further and find out more about Dutch Lady Malaysia.
In my research, I discovered eight interesting facts about Dutch Lady that made it a solid and stable investment.Dutch Lady Milk Industries Berhad have to take a quick action to overcome the changes especially during the product life cycle where there is for stages such as introduction, growth, maturity and decline%(5).
financial report Dutch lady - Free download as Word Doc .doc), PDF File .pdf), Text File .txt) or read online for free. “Helping Malaysians move forward in life with trusted dairy nutrition.” 4. Products market and as a result its should gain and advantage against Dutch lady, selling more product on/5(7).
Let us now move on to the 8 reasons why I love Dutch Lady Malaysia as an investment: #1 Recession Proof. Dutch lady is able to remain profitable even during periods of economic crisis.
Most companies will see their net profit dip substantially but for Dutch Lady their profits were hardly affected at all.
Cash Conversion Cycle (CCC) measures. Dutch Lady Milk Industries Berhad (doing business as Dutch Lady Malaysia) (MYX: ) is a manufacturer of cow milk and dairy products in Malaysia since the s. It was previously under Royal FrieslandFoods, a Netherlands-based multinational ultimedescente.comd: 28 May ; 55 years ago in Petaling Jaya, Selangor, Malaysia.
Dutch Lady is the first dairy company who listed in Bursa Malaysia and the top three companies in Malaysia which produce dairy product. Royal Friesland Company, in Netherlands is the holding company of Dutch Lady and the second largest holding Dutch Lady shares is Permodalan National Berhad.
Dutch Lady involve in new product development by adding new product in order to continue prospering as other items reach the later stages of product life cycle.
Innovation has been the driving force behind the growth of Dutch Lady Malaysia for the past fifty years, and it will continue to be that way as they lead the team into the next.Download