DCC‘s (LSE:DCC) a FTSE100 a sales, marketing and support services company. I think there is a lot of hidden value in his stock.

Earlier this month, news that it planned to try to unlock that value by selling one of its divisions sent shares up 10%. And I think there may be even more.

Hidden value

Officially, DCC shares trade at a price-to-earnings (P/E) ratio of 17, which is above the FTSE 100 average. However, the company does not believe this is an correct reflection of its value.

In its financial statements, a company provides a measure of profitability based on the exclusion of non-recurring costs and depreciation costs. On this basis, the share price implies a P/E multiple of 14.

Therefore, management believes that the stock is cheaper than it appears. Instead of waiting for the market to realize this – which may never happen – it takes action to unlock this value.

DCC has three operating divisions – energy, healthcare and technology. The plan is to focus on the energy business, which, according to the management board, has the greatest growth prospects. To this end, management plans to sell the healthcare business and conduct a strategic review of the technology division. The income will be returned to shareholders.

So the question is what investors can expect from the sale and what they will be left with. I think there are promising signs in both cases.

Returns

The healthcare unit and technology unit are on track to generate operating income of around £75m each this year. DCC can hope for eight times sales.

This would mean £600m – or 11% of the current market capitalization – in immediate return to investors. But the more captivating question is what will be left to shareholders.

DCC’s energy business generated £515m of operating profit in the last 12 months. Importantly, the company’s latest update indicates that it is growing at around 7%.

Subtracting the return on sales of the remaining units from the current market capitalization comes to £5 billion. I don’t think that’s a lot for a growing company generating £515m of operating income.

There are clear risks here. First, DCC may not get the deal it’s hoping for – while the company believes its healthcare business can grow, that hasn’t happened recently.

Another point is more certain. The sale of the remaining divisions will inevitably involve fees that will impact what shareholders gain from the sale.

Chance?

Investors clearly think DCC’s plan is a good one – the news saw the share price rise from £48.48 to £56.70. And despite the potential risks, I agree.

The jump in stock prices makes them less attractive than they once were. However, with a clear catalyst for realizing hidden value, I think it should definitely be on the radar of investors.

I don’t currently own DCC stock, but that may change soon. For now, I’m comparing it to several other FTSE 100 stocks before making a final investment decision.