Do you know management at all and how would you rate each?
What is in your mind the main reason to invest in each company and the biggest worry for each? (debt, dilution etc)
DRX profitability improved meaningfully in recent years. DRX is trading at 8.1x Forward P/E, while revenue is expected to grow around 10% over the next few years. Management has demonstrated a track record of execution by growing the business organically and generating healthy cash flow. DRX is attractive due to its cheap valuation, healthy growth, positive momentum. In the past, DRX had some cyclicality in the business, which could negatively impact operating results.
DE’s growth has been solid, more than 30% in the last few years, but the majority of the growth was financed by share issuance. The business is expected to growth around 15% next year, trading at 16.7x Forward P/E does not look expensive. The key risk with DE here is the risk of dilution if management continues to issue shares and fail to integrate acquisitions. We do have more recent comments on DE in the Q&A archives.