Russel Metals Inc.

Sound bite for Twitter and StockTwits is: Dividend paying industrial. Since I have not done that well with this stock, I was hoping that the current stock price would be cheap. However, it is currently testing at just reasonable. However, if you consider the cash on hand in the stock price, the current price might be considered cheap. The current recovery has not been very kind to a lot of companies. See my spreadsheet on Russel Metals Inc.

I own this stock of Russel Metals Inc. (TSX-RUS, OTC-RUSMF). This was a stock on Mike Higgs' Canadian Dividend Growth List. In 2007 I needed to reduce my holdings of Loblaws and buy something to help replace the dividends I had been earning. With Russel Metals, both Mike and TD recommend buying at this time. However I should keep a watch on this stock as it has had some troubles in the past.

This stock has been a poor performer for me. I have had it for almost 10 years. It has a total return of 5.42% per year with 5.33% from dividends and 0.09% from capital gains. I have an average price of $25.84 per share and the stock is currently worth $26.02. Dividends have been quite good. I have received $10.76 of dividends per share and so dividends have covered some 41.6% of my stock's cost.

This used to be a dividend growth stocks. However dividends have not grown since.2015. This is probably because the Dividend Payout Ratio in 2016 was 150% with a 5 year value of 159%. Analysts feel that the dividends will be covered by EPS in 2017 and then the DPR for EPS will move to around 85% in 2018.

This company is an industrial stock and industrial stocks tend to be volatile. The good thing is the good debt ratios. If you are in a volatile industry having good debt ratios are a must. Debt/Market Cap Ratio is just 0.19. The Liquidity Ratio is 3.31 and the Debt Ratio is 2.21 for 2016. These last two ratios should be at 150 or above so at their levels they are good. Leverage and Debt/Equity Ratios for 2016 are also good at 1.83 and 0.83.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.80, 16.09 and 19.21. The 10 year corresponding values are 12.95, 15.90 and 18.41. The historical values are 8.22, 9.69 and 11.17. The historical values are a lot lower than more recent values. The current P/E Ratio is 17.23 based on a stock price of $26.02 and EPS estimate for 2017 of $1.51. This stock price testing suggests that the stock price is relatively reasonable but above the median to relatively expensive.

I get a Graham Price of $21.31. The 10 year low, median and high median Price/Earnings per Share Ratios are 0.89, 1.13 and 1.38. The current P/GP Ratio is 1.22 based on a stock price of $26.02. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year Price/Book Value per Share Ratio of 1.83. The current P/B Ratio is 1.95 a value some 6.6% higher. The current P/B Ratio is based on BVPS of $13.37 and a Stock Price of $26.02. This stock price testing suggests that the stock price is relatively reasonable but above the median.

The historical median dividend yield is 4.87%. The current dividend yield is 5.84% based on dividends of $1.52 and a stock price of $26.02. The current dividend yield is some 19.95% above the historical median dividend yield. This stock price testing suggests that the stock price is reasonable and below the median. If the current dividend yield has been 20% above the historical median dividend yield the test would show that the stock price was relatively cheap.

One thing to mention is the amount of cash this company currently has. It has $2.94 per share which is 11.3% of the current stock price. That would basically make the true cost of the stock at $23.08. It would give the stock a current P/E of 15.28 It would give the stock a current P/GP Ratio of 1.08. It would make the current P/B Ratio be 1.73. All these changes would move the stock price to a relatively reasonable and below the median position. It would move the dividend yield to 6.59% and put this stock price testing to relatively cheap with a dividend yield some 35% below the historical median dividend yield.

When I look at analysts' recommendations, I find Buy and Hold recommendations. Most are Buy recommendations and the consensus recommendation is a Buy. The 12 month stock price consensus is $28.95. This implies a total return of 17.10% with 11.26% from capital gains and 5.84% from dividends.

Amy Steele on The Cerbat Gem says that TD Bank reiterated its Hold rating for this stock. This company has a Press Release News Wire about their 2016 results. See what analysts are saying about this stock on Stock Chase. Most remarks are positive.

Russel Metals Inc. is one of the largest metals distribution and processing companies in North America. The Company primarily distributes steel products and conducts its distribution business in three principal business segments: metals service centers; energy tubular products and steel distributors. Its web site is here Russel Metals Inc.

The last stock I wrote about was about was Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF)... learn more . The next stock I will write about will be Leon's Furniture Ltd. (TSX-LNF, OTC-LEFUF)... learn more on Friday, April 7, 2017 around 5 pm. Tomorrow on my other blog I will write about Something to Buy April 2017... learn more on Thursday, April 6, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.