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D&L Industries: A Great Company At A Wonderful Price

Mar. 08, 2021 4:44 PM ETD&L Industries, Inc. (DLNDY)5 Comments
BigFundamental profile picture


  • The best mid-cap company in the Philippines run by excellent management with a strong track record of consistent growth for over 50 years.
  • Asset-light business with a strong moat that enables it to consistently earn high returns on capital and create shareholder value.
  • Macroeconomic factors and the pandemic have driven the share price to cheap levels during the last couple of years.
  • Attractive growth outlook driven by the strong growth outlook of the Philippine economy, its robust export business, and increasing contribution of high margin products.
  • Company Profile

D&L Industries Inc. (OTCPK:DLNDY) or (PH:DNL) as listed in the Philippine stock exchange is a Filipino, family-owned mid-cap company that manufactures specialized ingredients for food and chemicals used by leading consumer companies in the food, personal care, and automotive industry.

The company has been operating for 57 years and it went public in June 2012 at Php4.30 per share on the Philippine stock exchange.

As of the end of 2019, the company was 60% owned by Jadel Holdings Co., Inc. (JHI) (a holding company majority-owned by the Lao family), 11% by the Lao family, and 29% by the public.

Source: Company presentation

The stock has traded between a low of Php4.0 per share and an all-time high of Php13.50 per share (2017) since its IPO in 2012.

Currently, it's trading at Php7.58 per share with a market cap of Php54.14 billion or about US$1.11 billion. Average daily trading volume is Php2 million or US$40,000 value traded.


Over the last decade, the company had shown excellent growth with earnings growing at a 9-year CAGR of 19%.

However, growth began to slow down since 2017. During 2017, earnings grew by 10.5% but this slow down was more due to a high-base the previous year due to the one-off boost in consumer spending as a result of the elections in 2016.

But in 2018 the company's earnings just grew roughly by 10% as the spike in Philippine inflation resulted in poor consumer sentiment.

In 2019, slowing global growth, compounded by the US-China trade war, led to a slowdown in the company's export business (which accounted for around 19% of revenue) while the delay of the approval of the national budget and the lingering effects of high inflation from the previous year, resulted in continuing negative consumer sentiment and a decline in government spending.

This article was written by

BigFundamental profile picture
I look for asymmetric opportunities whether in value, growth, or special situations. My investing style is influenced by Benjamin Graham, Bruce Greenwald, Warren Buffett, Joel Greenblatt., Seth Klarman, Peter Lynch, and Geoff Gannon.

Analyst’s Disclosure: I am/we are long DLNDY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (5)

Why isnt there any reference to D&N's DALQF stock?
09 Mar. 2021
Why no mention of comps and rel Val?
BigFundamental profile picture
@Rdub3 Added it already, hopefully it gets approved. Thanks!
astute pathways profile picture
This is the first time i have ever seen a Philliphine listed company
BigFundamental profile picture
@astute pathways A lot of value in the Philippines the last year or so with foreign funds selling since its share in indices like MSCI has been decreased the past few years and given to China and also due to Covid. I believe now is the time to buy as vaccines are rolled out and sentiment remains poor.
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