Q: Please give us your assessment of Doman prospects with respect to tailwinds on housing starts, softwood tariffs and whether it is timely to invest in them. What would a good entry price be?
Grazzia
Grazzia
5i Research Answer:
DBM is a building material distributor focused on lumber and treated wood. The company expects good growth this year and it is also monetizing its timberland holdings to strengthen the balance sheet which will help add some flexibility for the company. Wood pricing is a bit of a headwind currently as is general homebuilding volume but this should improve over time. At 10X earnings and with a 6% dividend yield, we think it looks fine and the valuation might see some expansion as the balance sheet improves.