DCC Plc (LON: DCC) is a publicly traded company on the London Stock Exchange. The firm facilitates the provision of international sales, marketing, and business support services. It operates through three major segments, DCC Energy, DCC Healthcare, and DCC Technology.
Why has the DCC stock price fallen?
From the past three years, the DCC stock has fallen more than 35% meanwhile the FTSE 100 has increased more than 26% in the same period. Despite having no negative news in the market for the company, what could be the reason behind the downfall?
On the annual revenue charts, the company has made a growth of 28% on average in the previous 3 years. As this profit translates into the net level, the earnings per share increased by an average of 10.7% during the period.
What About Dividends?
Another major lookout for investors can be the dividend structure of the stock. This has also been approved by DCC as they are providing regular dividends to their shareholders. The average dividend per share in 2022 was £1.8 while the dividend yield was 3.97%, along with that, the firm is also maintaining its healthy dividend payout ratio of over 50% on average.
The strong financials are proof that the company is performing well on a fundamental basis. The decline in the stock seems to be a correction of the valuation as the company is growing its market cap. Its EV/EBITDA and the P.E ratios will move closer to the industry level which can further cause a correction in the stock prices.
Technical analysis and price prediction of DCC stock
As of this writing, the DCC stock price is trading at £4565. The bulls have reclaimed their support level of £4231 while breaking past their 50-day EMA level of £4412. The bulls are further trying to get past the 200-day EMA, which is at £4594. However, if the uptrend continues, the strong momentum will be enough to break past the immediate resistance level of £4647
The relative strength index is showing a spike after touching an oversold level of 30, at the end of August this year. Since then, it has been in an uptrend. Moreover, just a few days after the touch point, the RSI line made a bullish crossover with its SMA line. At present, the RSI is at an overbought level of 69 while its SMA is at 52.
Conclusion
The DCC PLC stock has been down for the past 3 years despite the strong financial performance of the company. At present it is trying to get past its immediate resistance level. However, it will likely rebound as the RSI has touched its oversold levels already.
Technical Levels
Support levels: £4231 and £4033
Resistance levels: £4647 and £4938
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2023/09/15/dcc-stock-analysis-prices-down-36-despite-the-strong-financials/