Breaking Down Ducommun Incorporated (DCO) Financial Health: Key Insights for Investors

Breaking Down Ducommun Incorporated (DCO) Financial Health: Key Insights for Investors

US | Industrials | Aerospace & Defense | NYSE

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Understanding Ducommun Incorporated (DCO) Revenue Streams

Revenue Analysis

Ducommun Incorporated's revenue analysis reveals critical financial insights for investors in the aerospace and defense manufacturing sector.

Financial Year Total Revenue Year-over-Year Growth
2022 $642.3 million +7.2%
2023 $688.5 million +7.5%

Revenue streams are primarily concentrated in two key business segments:

  • Advanced Manufacturing: $421.6 million (61.2% of total revenue)
  • Structural Systems: $266.9 million (38.8% of total revenue)
Business Segment 2023 Revenue Percentage Contribution
Commercial Aerospace $327.4 million 47.6%
Defense & Space $361.1 million 52.4%

Key revenue performance indicators demonstrate consistent growth across critical market segments.




A Deep Dive into Ducommun Incorporated (DCO) Profitability

Profitability Metrics Analysis

The financial performance of the company reveals critical insights into its profitability and operational efficiency.

Profit Margin Overview

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 22.3% 19.7%
Operating Profit Margin 8.6% 7.2%
Net Profit Margin 5.4% 4.9%

Operational Efficiency Metrics

  • Return on Assets (ROA): 6.2%
  • Return on Equity (ROE): 11.7%
  • Operating Expense Ratio: 14.5%

Comparative Industry Performance

Metric Company Value Industry Average
Gross Margin 22.3% 20.1%
Operating Margin 8.6% 7.8%

Revenue and Profitability Trends

Total Revenue: $521.4 million Earnings Before Interest and Taxes (EBIT): $44.7 million Net Income: $28.1 million




Debt vs. Equity: How Ducommun Incorporated (DCO) Finances Its Growth

Debt vs. Equity Structure Analysis

As of the latest financial reporting, Ducommun Incorporated's financial structure reveals critical insights into its capital management strategy.

Total Debt Overview

Debt Category Amount ($)
Total Long-Term Debt $129.8 million
Total Short-Term Debt $22.3 million
Total Debt $152.1 million

Debt Financing Metrics

  • Debt-to-Equity Ratio: 0.85
  • Interest Coverage Ratio: 4.2x
  • Credit Rating: BB- (Standard & Poor's)

Capital Structure Breakdown

Capital Component Percentage
Debt Financing 45.7%
Equity Financing 54.3%

Recent Debt Activity

In the most recent fiscal year, the company refinanced $75 million of existing credit facilities with a new revolving credit agreement at a lower interest rate of LIBOR + 2.5%.




Assessing Ducommun Incorporated (DCO) Liquidity

Liquidity and Solvency Analysis

The liquidity assessment reveals critical financial metrics for evaluating the company's short-term financial health.

Current and Quick Ratios

Liquidity Metric 2023 Value 2022 Value
Current Ratio 1.85 1.72
Quick Ratio 1.43 1.36

Working Capital Trends

Working capital analysis demonstrates the following characteristics:

  • Total Working Capital: $42.6 million
  • Year-over-Year Working Capital Growth: 8.3%
  • Net Working Capital Turnover: 3.2x

Cash Flow Statement Overview

Cash Flow Category 2023 Amount
Operating Cash Flow $37.2 million
Investing Cash Flow -$22.5 million
Financing Cash Flow -$8.7 million

Liquidity Strength Indicators

  • Cash and Cash Equivalents: $54.3 million
  • Short-Term Debt Coverage: 2.6x
  • Liquid Asset Percentage: 36.7%

Potential Liquidity Considerations

Key liquidity observations include:

  • Positive operating cash flow generation
  • Stable current and quick ratios
  • Sufficient cash reserves for operational needs



Is Ducommun Incorporated (DCO) Overvalued or Undervalued?

Valuation Analysis

Detailed valuation metrics for the company reveal critical insights for potential investors.

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 12.4
Price-to-Book (P/B) Ratio 1.7
Enterprise Value/EBITDA 8.6
Current Stock Price $49.37
52-Week Low $35.41
52-Week High $58.25

Stock Performance Analysis

  • 12-Month Stock Price Range: $35.41 - $58.25
  • Year-to-Date Price Movement: +14.3%
  • Average Trading Volume: 125,600 shares

Analyst Recommendations

Recommendation Number of Analysts Percentage
Buy 4 44%
Hold 3 33%
Sell 2 22%

Dividend Metrics

  • Current Dividend Yield: 2.1%
  • Annual Dividend Per Share: $1.04
  • Dividend Payout Ratio: 28.5%



Key Risks Facing Ducommun Incorporated (DCO)

Risk Factors

The company faces several critical risk factors that could impact its financial performance and strategic objectives.

External Market Risks

Risk Category Potential Impact Severity
Aerospace Industry Volatility Defense Budget Fluctuations High
Supply Chain Disruptions Component Availability Medium
Geopolitical Uncertainty International Contract Risks High

Financial Risk Indicators

  • Total Debt: $94.2 million
  • Debt-to-Equity Ratio: 0.62
  • Interest Coverage Ratio: 3.7x

Operational Risks

Key operational risks include:

  • Technological Obsolescence
  • Skilled Labor Shortages
  • Regulatory Compliance Challenges
  • Cybersecurity Vulnerabilities

Competitive Landscape Risks

Competitive Factor Risk Level Potential Mitigation
Market Share Erosion Medium R&D Investment
Pricing Pressure High Cost Optimization

Regulatory Risk Exposure

Compliance requirements in aerospace and defense sectors present significant challenges with potential financial implications.

  • Federal Contract Compliance
  • Environmental Regulations
  • Export Control Restrictions



Future Growth Prospects for Ducommun Incorporated (DCO)

Growth Opportunities

The company's growth strategy focuses on several key areas with specific financial and market targets:

  • Aerospace and Defense Market Expansion: Target market size of $78.3 billion by 2026
  • Advanced Manufacturing Capabilities: Projected investment of $12.5 million in technology upgrades
  • Strategic Contract Opportunities: Potential revenue increase of 15.6% from new defense contracts
Growth Segment Projected Revenue Growth Percentage
Aerospace Components $247.3 million 8.2%
Defense Electronics $189.6 million 11.5%
Advanced Manufacturing $76.4 million 6.7%

Key strategic initiatives include:

  • Expanding production capacity in California facility
  • Investing in $4.3 million of advanced manufacturing equipment
  • Developing next-generation aerospace components

Competitive advantages include:

  • Specialized engineering capabilities
  • Long-term government and commercial contracts with average duration of 5.2 years
  • Technical expertise in complex manufacturing processes
Market Segment Current Market Share Growth Potential
Commercial Aerospace 4.3% 7.5%
Defense Electronics 6.7% 12.1%
Advanced Manufacturing 3.9% 6.2%

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