DP World (DFM:DPW) Forward Rate of Return (Yacktman) %: 23.19% (As of Dec. 2019) — 179% Above Median

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Director of Data and Quant Analytics at GuruFocus
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What is DP World Forward Rate of Return (Yacktman) %?

DP World DFM:DPW Forward Rate of Return (Yacktman) % is 23.19% as of Dec. 2019, which is 179% above its 10-year median of 8.31. The stock has 9 warning signs investors should review.

Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. DP World's forward rate of return for was 23.19%.

The historical rank and industry rank for DP World's Forward Rate of Return (Yacktman) % or its related term are showing as below:

DFM:DPW' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 1.34   Med: 8.31   Max: 25.48
Current: 22.68

During the past 13 years, DP World's highest Forward Rate of Return was 25.48. The lowest was 1.34. And the median was 8.31.

DFM:DPW's Forward Rate of Return (Yacktman) % is not ranked
in the Transportation industry.
Industry Median: 10.6 vs DFM:DPW: 22.68

Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.


DP World  (DFM:DPW) Forward Rate of Return (Yacktman) % Explanation

Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.


Be Aware

In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.


DP World Forward Rate of Return (Yacktman) % Related Terms


DP World Forward Rate of Return (Yacktman) % Historical Data

* Premium members only.

The historical data trend for DP World's Forward Rate of Return (Yacktman) % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

DP World Forward Rate of Return (Yacktman) % Chart

DP World Annual Data
Trend Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19
Forward Rate of Return (Yacktman) %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 8.33 11.37 15.91 21.61 23.19

DP World Semi-Annual Data
Jun10 Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19
Forward Rate of Return (Yacktman) % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 15.91 0.00 21.61 0.00 23.19

DFM:DPW vs KEX: Forward Rate of Return (Yacktman) % Comparison

For the Marine Shipping subindustry, DP World's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


DP World Forward Rate of Return (Yacktman) % vs Transportation Industry

For the Transportation industry and Industrials sector, DP World's Forward Rate of Return (Yacktman) % distribution charts can be found below:

* The bar in red indicates where DP World's Forward Rate of Return (Yacktman) % falls into.



DP World Forward Rate of Return (Yacktman) % Calculation

Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

DP World's Forward Rate of Return of Dec. 2019 is

Forward Rate of Return=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=3.74633333/0+0.1446
=0 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

What does a Forward Rate of Return (Yacktman) % of 23.19% mean?
DP World (DFM:DPW) has a Forward Rate of Return (Yacktman) % of 23.19% as of Dec. 2019. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on DP World and its competitors. This is 179% above median its historical median of 8.31. Over the past decade, DP World's Forward Rate of Return (Yacktman) % has ranged from 1.34 to 25.48.
Is DP World's Forward Rate of Return (Yacktman) % too high?
DP World's current Forward Rate of Return (Yacktman) % of 23.19% is 179% above median its 10-year median of 8.31. Over the past 10 years, this metric has ranged from a low of 1.34 to a high of 25.48. The Transportation industry median Forward Rate of Return (Yacktman) % is 10.60. DP World's value of 23.19% is 118.8% above this industry median.
How does DP World's Forward Rate of Return (Yacktman) % compare to KEX?
DP World's Forward Rate of Return (Yacktman) % of 23.19% can be compared against companies in the Transportation industry. The industry median Forward Rate of Return (Yacktman) % is 10.60. DP World's value of 23.19% is 118.8% above this benchmark. Historically, DP World's own Forward Rate of Return (Yacktman) % has ranged from 1.34 to 25.48 over the past decade. While the company's 10-year median is 8.31 vs. the industry median of 10.60, DP World has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Forward Rate of Return (Yacktman) % for a Transportation company?
The median Forward Rate of Return (Yacktman) % among Transportation companies is 10.60, based on 755 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. DP World's current Forward Rate of Return (Yacktman) % of 23.19% is 118.8% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on DP World and its competitors. For the Transportation industry, the median Forward Rate of Return (Yacktman) % is 10.60 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. DP World's current Forward Rate of Return (Yacktman) % is 23.19%, which is 179% above median its own 10-year median of 8.31. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is DP World stock overvalued right now?
DP World (DFM:DPW) has a current Forward Rate of Return (Yacktman) % of 23.19%. The current Forward Rate of Return (Yacktman) % is 23.19%, which is 179% above median its 10-year median of 8.31 and 118.8% above the Transportation industry median of 10.60. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For DP World (DFM:DPW), the current Forward Rate of Return (Yacktman) % is 23.19% as of Dec. 2019. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.

DP World Business Description

Address Office 27, Level 3, Gate Village Building 4, PO Box 17000, Dubai International Financial Centre, Dubai, ARE
DP World PLC is a transportation and logistics company, domiciled in the United Arab Emirates. The company develops and manages international marine and inland terminal facilities, operates industrial parks and economic zones, and provides logistics services. DP World organises itself into three geographical segments: Asia-Pacific and the Indian subcontinent; Australia and Americas; and the Middle East, Europe, and Africa. The company derives the vast majority of revenue from the Middle East, Europe, and Africa.