Those numbers might make Dassault look unimpressive, but before you judge take these facts into account. Dassault still recorded over ten times more revenue in the Asia region than either of its American counterparts. In the Americas, it currently generates more than three times as much revenue as 3D Systems Corporation (NYSE:DDD) or Stratasys, Ltd. (NASDAQ:SSYS).
Don’t let the lower revenue growth rates of Dassault fool you. It is nearly impossible for a company generating so much more in revenue to achieve greater growth rates than its smaller adversaries.
Margins for 3D printers
Looking at revenue growth is all well and good. But more importantly you need to know how efficiently the company you are looking at is converting sales into profits. There are plenty of margins out there that can give you clues to the answer of that question.
Two that I prefer are EBITD and net profit margin. In the following table I’ve compared those ratios for these three companies. I’ve also included return on equity, another highly reliable measure of efficiency.
|Net Profit Margin (TTM)||10.2%||(4.2%)||16.59%|
|Net Profit Margin 5 year avg||8.9%||8%||15.34%|
|EBITD Margin (TTM)||23.8%||(2.6%)||30.64%|
|EBITD Margin 5 year avg||9.71%||19.95%||28.62%|
|Return on equity (TTM)||9.7%||(1.32%)||14.5%|
|Return on equity 5 year avg||10.01%||3.92%||14.54%|
Margin figures for DDD and SSYS came from fool.com, DASTY margins and ROE figures for all three companies came courtesy of Reuters.
First Dassault kicks the Americans’ butts in terms of diversity, and now margins too? Looks like it. Dassault has margins that crush the competition. America is better than France at many things, but it doesn’t look like 3D printing is one of them.
Final foolish words
3D printing is going to change the world in ways that many of us can’t even fathom. It’s not just a passing fad, we have a legitimate technological revolution on our hands. Many American investors are very aware of this and as such are investing in the two domestic 3D printing giants, 3D Systems Corporation (NYSE:DDD) and Stratasys. In doing so they may be allowing an excellent company from France, Dassault Systemes, to fly under their radars.
Dassault Systemes has not, and most likely will not, be able to grow at the rate of 3D Systems or Stratasys. The main reason for this is that Dassault already generates much more revenue than its American counterparts. However, when it comes to diversity and margins Dassault is the clear cut winner. Compared with either of the Americans, Dassault has operations in over three times as many countries. In terms of return on equity and just about any margin you can think of, Dassault has been the best performer. Taking all of that into account, if you are thinking about buying 3D printing stock, I would consider Dassault Systemes.
Ryan Palmer has no position in any stocks mentioned. The Motley Fool recommends 3D Systems and Stratasys. The Motley Fool owns shares of 3D Systems and Stratasys and has the following options: Short Jan 2014 $36 Calls on 3D Systems and Short Jan 2014 $20 Puts on 3D Systems. Ryan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article An Under the Radar French 3D Printing Company originally appeared on Fool.com is written by Ryan Palmer.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.