On the four Ms, PotlatchDeltic Corp. earns 49 for management and 30 for moat. The management score rests on a return on invested capital of 1.0% and a gross margin of 11.0% — figures that describe returns closer to the cost of the capital behind them. Debt sits at 0.51x equity. A narrow moat alongside mixed management is a combination worth understanding before the price matters at all.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 5.1% a year, the rate measured from the filings. The exit multiple assumed is 10.3x. That produces an intrinsic value of $3.43, a 10-CAP price of $19.56 and a payback time price of $19.73, with the value zone set at the highest of the three, $19.73. Today's price of $41.73 is 112% above it.
The price is above the value zone and the business scores 30 for moat and 49 for management. Neither test argues for paying up here.
| Price | $41.73 |
| Market cap | $3.2B |
| P/E ratio | 50.9x |
| Return on invested capital | 1.0% |
| Gross margin | 11.0% |
| Debt to equity | 0.51x |
| Free cash flow yield | 2.2% |
| Growth rate used | 5.1% |
| Growth rate measured | 5.0% |
| Exit multiple assumed | 10.3x |
| Company | Moat | Buy price |
| SBA Communications (SBAC) | 45 | $111.78 |
| Iron Mountain (IRM) | 33 | $10.28 |
| Digital Realty (DLR) | 53 | $62.46 |
| American Tower Corp. (AMT) | 59 | $100.23 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of PotlatchDeltic Corp. rather than accepting ours.