A Look At Danaos (DAC) Valuation After Strong Q4 Results And New Dividend Announcement

Danaos (DAC) has paired its latest earnings release with a fresh dividend announcement, reporting higher fourth quarter sales and net income alongside a declared US$0.90 per share dividend for common shareholders.

See our latest analysis for Danaos.

At a share price of US$103.00, Danaos has seen building momentum recently, with a 30 day share price return of 4.32% and a 90 day gain of 9.10%, while its 1 year total shareholder return of 32.24% and 5 year total shareholder return of 235.11% reflect how investors have been rewarded over time around its earnings and dividend updates.

If this combination of earnings strength and dividends has your attention, it could be a good moment to see what else is out there using our screener of 22 top founder-led companies.

With earnings per share of US$6.43 in the quarter and a declared US$0.90 dividend, plus a reported intrinsic discount of about 31%, you have to ask: is Danaos undervalued here, or is the market already pricing in future growth?

Most Popular Narrative: 1% Undervalued

With Danaos last closing at $103.00 against a most followed fair value of $104.00, the current price sits very close to that narrative anchor.

The analysts have a consensus price target of $101.5 for Danaos based on their expectations of its future earnings growth, profit margins and other risk factors.

In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $915.2 million, earnings will come to $381.3 million, and it would be trading on a PE ratio of 5.4x, assuming you use a discount rate of 10.8%.

Read the complete narrative.

Want to see what really underpins that $104.00 fair value? The story leans heavily on shrinking top line, still strong margins, and a future earnings multiple that might surprise you.

Result: Fair Value of $104.00 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that story can change quickly if shipping demand softens faster than expected or if future charter renewals come through on less favorable terms.

Find out about the key risks to this Danaos narrative.

Build Your Own Danaos Narrative

If you are not fully on board with this view, or you prefer to weigh the numbers yourself, you can build a custom thesis in just a few minutes using Do it your way.

A great starting point for your Danaos research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If Danaos has you thinking more broadly about your portfolio, do not stop here, as you could miss other opportunities that better fit your goals and risk comfort.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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