# DOWA Holdings (5714.JP)

Canonical: https://gigainvestors.com/s/5714.JP

Analysis as of: 2026-10-15T07:10:41.148Z. Financial observations: FY2013–FY2026.

Listing currency: JPY. Reporting currency: JPY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: JPY 8,088.00 per share; close as of 2026-10-15.

Estimated value: low JPY 3,345.79 per share, central JPY 3,722.94 per share, high JPY 4,225.00 per share. Buy at or below the central value JPY 3,722.94 per share. Valuation as of 2026-10-15T07:10:41.148Z; scenarios are not confidence intervals.

Expected annual return: 5.9% at the stated quote. About 5.9% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; JP 10-year bond 2.9% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.24×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.08×

- FY2018: 0.07×

- FY2019: 0.04×

- FY2020: 0.05×

- FY2021: 0.06×

- FY2022: 0.08×

- FY2023: 0.06×

- FY2024: 0.04×

- FY2025: 0.05×

- FY2026: 0.05×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 5.9%

- ROIC, second-lowest year: 4.9%

- Typical minus recent gross margin: 0.7 pp

- Typical gross margin (annual median): 12.8%

- Recent gross margin (lower of latest and 3-year median): 12.1%

- Years with nonpositive capital: 0

- Capital spending / revenue: 5.3%

- ROIC including acquisitions, ten-year median: 4.5%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 8.8%

- FY2018: 6.8%

- FY2019: 3.5%

- FY2020: 4.9%

- FY2021: 6.1%

- FY2022: 11.6%

- FY2023: 6.8%

- FY2024: 5.4%

- FY2025: 5.4%

- FY2026: 5.7%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 0.78×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: JPY 151B

- Net income, five-year total: JPY 193B

- Return on incremental invested capital: 1.3%

- Working capital / revenue, annual change: 0.6 pp

- Working capital / revenue, change between three-year averages: 2.6 pp

- Working capital / revenue, final three-year average: 36.3%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 0.99×

- FY2023: 0.62×

- FY2024: 0.51×

- FY2025: 0.30×

- FY2026: 0.99×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 6.8% vs 5.4%

- Per-share earnings: 417.21 to 467.90 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.1%

- Ordinary dilution, 5-year annual growth: 0.1%

- Market cap gain: JPY 282B

- Cumulative retained earnings: JPY 207B

- Diluted shares, 10-year annual growth: 0.1%

- Diluted shares, 5-year annual growth: 0.1%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 1.4%

- Per-share value change: JPY 50.69

- Per-share value, starting three-year median: JPY 417.21

- Per-share value, ending three-year median: JPY 467.90

- Buybacks concentrated in cheaper years (correlation): 0.18

- Average buyback yield: 0.3%

- Buyback history: 7 years

- Debt-funded buybacks: Yes

- Acquisition spending: JPY 3.6B

- Cumulative net income, 10 years: JPY 299B

- ROIC, first three-year median: 6.8%

- ROIC, last three-year median: 5.4%

Chart: Earnings per share; fiscal year observations.

- FY2017: JPY 442.16

- FY2018: JPY 417.21

- FY2019: JPY 253.22

- FY2020: JPY 293.92

- FY2021: JPY 368.45

- FY2022: JPY 857.32

- FY2023: JPY 420.76

- FY2024: JPY 467.90

- FY2025: JPY 455.60

- FY2026: JPY 1K

### accounting: pass

- Sloan accruals: 7.2%

- Receivables to sales index (DSRI): 1.04×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.08×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.02×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -0.8%

- FY2018: 3.0%

- FY2019: -4.6%

- FY2020: -7.4%

- FY2021: 4.2%

- FY2022: -1.4%

- FY2023: -3.9%

- FY2024: -14.3%

- FY2025: 2.1%

- FY2026: 7.2%

## Holders

## Price story

Down 30% since Feb 2026 · sales +9.8%

Story as of 2026-10-16T10:00:14.384Z; price observation 2026-10-15.

Price needs cash profits to grow 11.9% a year for ten years

### Sales · FY2025–2026

sales +9.8%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YGIN.pdf; observed 2026-06-23.

- FY2017: JPY 411B 

- FY2018: JPY 455B 

- FY2019: JPY 453B 

- FY2020: JPY 485B 

- FY2021: JPY 588B 

- FY2022: JPY 832B 

- FY2023: JPY 780B 

- FY2024: JPY 717B 

- FY2025: JPY 679B 

- FY2026: JPY 745B 

### Gross margin · FY2026

gross margin 12.1%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YGIN.pdf; observed 2026-06-23.

- FY2017: 16.9% 

- FY2018: 14.7% 

- FY2019: 12.5% 

- FY2020: 13.1% 

- FY2021: 12.9% 

- FY2022: 12.8% 

- FY2023: 11.6% 

- FY2024: 11.4% 

- FY2025: 12.8% 

- FY2026: 12.1% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Annual sales are JPY 745.4 billion.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YGIN.pdf (filed 2026-06-23); FY2026: revenue 745410000000; grossProfit 90299000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 11.4% to 12.8% during 2024–26; it earns 5.9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); FY2024: grossProfit / revenue = 11.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); FY2025: grossProfit / revenue = 12.8%.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YGIN.pdf (filed 2026-06-23); FY2026: grossProfit / revenue = 12.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); 10-year return on capital observations [[2017,0.08815240602780144],[2018,0.06847994609675881],[2019,0.03490247788425037],[2020,0.04870786971007547],[2021,0.06120119259505063],[2022,0.11615415733019663],[2023,0.06772114205640217],[2024,0.05448057590401879],[2025,0.053884368347744856],[2026,0.05717335132082129]]; median 0.05918727195793596. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 13% gross margin through 2022 cost inflation.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YGIN.pdf (filed 2026-06-23); Gross margin observations: [[2021,0.1289925391537118],[2022,0.12794634248383613],[2023,0.11642565956464887]]; range within 2 percentage points.

### Where the cash goes

Spends 6.8% of cash earnings on expansion; earns 1.3% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); FY2017: growth capex 1095020009.2917404; upkeep 24868979990.70826; owner earnings 16643020009.29174. Growth capex / owner earnings = 0.0657945498281198.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); FY2018: growth capex 6824000000; upkeep 17212000000; owner earnings 23970000000. Growth capex / owner earnings = 0.28468919482686694.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); FY2019: growth capex 0; upkeep 23683000000; owner earnings 9588000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); FY2020: growth capex 9318921908.567665; upkeep 26807078091.432335; owner earnings 9692921908.567665. Growth capex / owner earnings = 0.9614151435936549.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); FY2021: growth capex 14972000000; upkeep 20050000000; owner earnings 21549000000. Growth capex / owner earnings = 0.69478862128173.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); FY2022: growth capex 9197000000; upkeep 22582000000; owner earnings 50650000000. Growth capex / owner earnings = 0.18157946692991114.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); FY2023: growth capex 0; upkeep 33076000000; owner earnings 15552000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); FY2024: growth capex 0; upkeep 38357000000; owner earnings 14325000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); FY2025: growth capex 0; upkeep 47177000000; owner earnings 8194000000. Growth capex / owner earnings = 0.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YGIN.pdf (filed 2026-06-23); FY2026: growth capex 4211000000; upkeep 30965000000; owner earnings 62001000000. Growth capex / owner earnings = 0.06791825938291318.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); Incremental return on capital 0.012817583732647865, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); Dividend observations: [[2017,5408000000],[2018,5409000000],[2019,5408000000],[2020,5408000000],[2021,5407000000],[2022,5709000000],[2023,7809000000],[2024,7811000000],[2025,7815000000],[2026,9021000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YGIN.pdf (filed 2026-06-23); FY2026: cash repurchases 9991000000 JPY.

### What the price says

The price assumes cash profits grow 11.9% yearly over ten years; actual growth was 14.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-23); Ten-year compound average after fade. Initial solved rate 0.1592116131406477. Price 8088; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 267.36078438559514 → FY2026 1042.1484810592717. Closing-price date 2026-10-15.

## Monthly share-price history (JPY per share)

- 2016-11: JPY 4,390.00 per share

- 2016-12: JPY 4,470.00 per share

- 2017-01: JPY 4,805.00 per share

- 2017-02: JPY 4,555.00 per share

- 2017-03: JPY 4,010.00 per share

- 2017-04: JPY 4,150.00 per share

- 2017-05: JPY 4,180.00 per share

- 2017-06: JPY 4,255.00 per share

- 2017-07: JPY 4,465.00 per share

- 2017-08: JPY 4,150.00 per share

- 2017-09: JPY 4,125.00 per share

- 2017-10: JPY 4,755.00 per share

- 2017-11: JPY 4,270.00 per share

- 2017-12: JPY 4,600.00 per share

- 2018-01: JPY 4,540.00 per share

- 2018-02: JPY 3,975.00 per share

- 2018-03: JPY 3,810.00 per share

- 2018-04: JPY 4,130.00 per share

- 2018-05: JPY 3,445.00 per share

- 2018-06: JPY 3,415.00 per share

- 2018-07: JPY 3,590.00 per share

- 2018-08: JPY 3,325.00 per share

- 2018-09: JPY 3,610.00 per share

- 2018-10: JPY 3,295.00 per share

- 2018-11: JPY 3,740.00 per share

- 2018-12: JPY 3,300.00 per share

- 2019-01: JPY 3,480.00 per share

- 2019-02: JPY 3,640.00 per share

- 2019-03: JPY 3,640.00 per share

- 2019-04: JPY 3,615.00 per share

- 2019-05: JPY 3,390.00 per share

- 2019-06: JPY 3,455.00 per share

- 2019-07: JPY 3,460.00 per share

- 2019-08: JPY 3,400.00 per share

- 2019-09: JPY 3,690.00 per share

- 2019-10: JPY 3,760.00 per share

- 2019-11: JPY 3,915.00 per share

- 2019-12: JPY 4,075.00 per share

- 2020-01: JPY 3,975.00 per share

- 2020-02: JPY 3,565.00 per share

- 2020-03: JPY 2,829.00 per share

- 2020-04: JPY 3,010.00 per share

- 2020-05: JPY 3,460.00 per share

- 2020-06: JPY 3,270.00 per share

- 2020-07: JPY 3,080.00 per share

- 2020-08: JPY 3,295.00 per share

- 2020-09: JPY 3,080.00 per share

- 2020-10: JPY 2,977.00 per share

- 2020-11: JPY 3,450.00 per share

- 2020-12: JPY 3,735.00 per share

- 2021-01: JPY 3,815.00 per share

- 2021-02: JPY 4,195.00 per share

- 2021-03: JPY 4,605.00 per share

- 2021-04: JPY 4,560.00 per share

- 2021-05: JPY 4,535.00 per share

- 2021-06: JPY 4,375.00 per share

- 2021-07: JPY 4,235.00 per share

- 2021-08: JPY 4,830.00 per share

- 2021-09: JPY 4,420.00 per share

- 2021-10: JPY 4,745.00 per share

- 2021-11: JPY 4,220.00 per share

- 2021-12: JPY 4,835.00 per share

- 2022-01: JPY 4,945.00 per share

- 2022-02: JPY 5,210.00 per share

- 2022-03: JPY 5,610.00 per share

- 2022-04: JPY 5,540.00 per share

- 2022-05: JPY 4,715.00 per share

- 2022-06: JPY 4,505.00 per share

- 2022-07: JPY 4,795.00 per share

- 2022-08: JPY 5,270.00 per share

- 2022-09: JPY 5,190.00 per share

- 2022-10: JPY 4,735.00 per share

- 2022-11: JPY 4,520.00 per share

- 2022-12: JPY 4,150.00 per share

- 2023-01: JPY 4,510.00 per share

- 2023-02: JPY 4,435.00 per share

- 2023-03: JPY 4,245.00 per share

- 2023-04: JPY 4,430.00 per share

- 2023-05: JPY 4,045.00 per share

- 2023-06: JPY 4,546.00 per share

- 2023-07: JPY 4,588.00 per share

- 2023-08: JPY 4,682.00 per share

- 2023-09: JPY 4,651.00 per share

- 2023-10: JPY 4,578.00 per share

- 2023-11: JPY 5,256.00 per share

- 2023-12: JPY 5,152.00 per share

- 2024-01: JPY 5,173.00 per share

- 2024-02: JPY 5,229.00 per share

- 2024-03: JPY 5,350.00 per share

- 2024-04: JPY 5,917.00 per share

- 2024-05: JPY 5,816.00 per share

- 2024-06: JPY 5,709.00 per share

- 2024-07: JPY 5,541.00 per share

- 2024-08: JPY 5,048.00 per share

- 2024-09: JPY 5,255.00 per share

- 2024-10: JPY 5,253.00 per share

- 2024-11: JPY 4,473.00 per share

- 2024-12: JPY 4,456.00 per share

- 2025-01: JPY 4,646.00 per share

- 2025-02: JPY 4,559.00 per share

- 2025-03: JPY 4,629.00 per share

- 2025-04: JPY 4,578.00 per share

- 2025-05: JPY 4,588.00 per share

- 2025-06: JPY 4,672.00 per share

- 2025-07: JPY 4,958.00 per share

- 2025-08: JPY 5,222.00 per share

- 2025-09: JPY 5,398.00 per share

- 2025-10: JPY 5,600.00 per share

- 2025-11: JPY 6,081.00 per share

- 2025-12: JPY 7,432.00 per share

- 2026-01: JPY 9,214.00 per share

- 2026-02: JPY 11,550.00 per share

- 2026-03: JPY 8,735.00 per share

- 2026-04: JPY 9,476.00 per share

- 2026-05: JPY 10,300.00 per share

- 2026-06: JPY 8,666.00 per share

- 2026-07: JPY 8,235.00 per share

- 2026-08: JPY 9,998.00 per share

- 2026-09: JPY 8,978.00 per share

- 2026-10: JPY 8,559.00 per share

## Annual estimated value (JPY per share)

- FY2020: low JPY 3,859.13 per share, central JPY 4,339.90 per share, high JPY 4,979.91 per share

- FY2021: low JPY 4,086.53 per share, central JPY 4,634.80 per share, high JPY 5,364.67 per share

- FY2022: low JPY 5,939.36 per share, central JPY 6,711.44 per share, high JPY 7,739.23 per share

- FY2023: low JPY 4,162.26 per share, central JPY 5,778.72 per share, high JPY 6,719.99 per share

- FY2024: low JPY 4,023.95 per share, central JPY 4,947.36 per share, high JPY 5,614.07 per share

- FY2025: low JPY 2,992.26 per share, central JPY 3,335.35 per share, high JPY 3,792.08 per share

- FY2026: low JPY 3,345.79 per share, central JPY 3,722.94 per share, high JPY 4,225.00 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original EDINET filing](https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YGIN.pdf); period 2026-03-31, filed 2026-06-23.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.