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Summary

  • Dassault Systemes is an excellent software house.
  • Results and profits are healthy.
  • The stock is expensive now, but when bought on a dip it could be a good long-term investment.
  • More speculative is the 20% upside using the outlook for 2014 given by the company.

Dassault Systemes (OTCPK:DASTY) is a French software house with excellent results and profits. At the moment the stock is not cheap and the dividend too low. When bought at a lower price it is a good long-term investment. When being more speculative, using the outlook for 2014, there is a upside potential of about 20%.

Dassault Systemes

Dassault Systemes produces 3D CAD/CAM and product lifecycle management software. In 1981 it started as part of Dassault Aviation (OTC:DUAVF), which is described in Purveyor Of France.

Dassault Systemes is 42% owned by Groupe Industriel Marcel Dassault, which also owns half of Dassault Aviation.

Dassault Systemes has a broad range of customers with a healthy distribution spread across the world. Users are often enthusiastic with the features and quality of the 3D software.

All financial data used is published by Dassault Systemes and recalculated using an exchange rate of USD/EUR 1.38 and x1M.

Dassault Systemes

2013

2012

2011

2010

2009

Revenue

$2,851.2

$2,799.1

$2,460.6

$2,158.1

$1,726.8

Net income

$490.2

$467.5

$400.9

$304.6

$318.8

EBIT

$694.1

$691.4

$590.5

$444.3

$318.8

EBIT%

24.35%

24.70%

24.00%

20.59%

18.46%

FCF

$640.9

$725.5

$523.7

$512.1

$0.0

EPS

$3.81

$3.75

$3.22

$2.51

$1.97

Dividend

$1.10

$0.97

$0.75

$0.63

Dividend % EBIT

0.00%

0.00%

0.00%

0.00%

0.00%

ROA

8.48%

9.38%

8.26%

7.18%

10.04%

ROCE

15.24%

18.67%

17.99%

14.02%

10.04%

ROE

13.54%

14.40%

13.94%

12.32%

15.96%

Debt/Equity

0.60

0.54

0.69

0.71

0.59

PE (Price/Earnings)

30

(Source: Confero)

Dassault Systemes has healthy revenue growth, although the increase of last year seems to be flattening.

(Source: Confero)

The EBIT% and net income are healthy and do not show losses. Not even in the difficult years of 2008/2009.

In the outlook for 2014 Dassault Systemes targets to:

  • Grow revenue in 2014 to $3.0B, an increase of 7%
  • Double-digit revenue growth of new licenses

INVESTING

Dassault Systemes is a well-run company with a healthy business and healthy margins.

However, at a PE of 30 and dividend yield of 1% at a current stock price of EUR 84.00 / / USD 115.92 it is not cheap.

There is not a lot of debt and the product portfolio is well-balanced between cash-generating cash-cows and developing new features/products.

At the current stock price Dassault Systemes would not be a buy, but at a lower price it is a stable long-term investment. The company is well run and no important risks are visible.

Dividends also are increasing although not very high given the current stock price.

More speculative is using the outlook for 2014 Dassault Systemes has given. With the current PE the stock has an upside potential of 20% with a target stock price of $140.00.

Source: Dassault Systemes: Excellent Results, But Expensive At Current Price