Wednesday, June 1, 2011

Russel Metals Inc

I own this stock (TSX-RUS). I have been tracking this stock for a number of years, but I did not buy this stock until 2007 and then I bought it again in 2009. For both these purchases, I seem to have bought the stock close, but not actually, at the top of the stock price range.

My buy in 2007 was prompted because I had just sold my Loblaw stock and I was looking for something to buy. A number of analysts were recommending it at that time. When I bought it again in 2009, the price seemed relatively good at the time. However, hind sight is everything. I have earned only 3.2% per year on this stock. Dividend portion of this total return was probably around 6.5%.

The total return for this stock over the past 5 and 10 years would have been 7.5% and 34% per year, respectively. The dividend portion of this return would have been 6.5% and 10.9% per year, respectively. Dividends were cut by 44% in 2009. However, dividend yield is currently good at 4.5%.

The dividend growth over the past 5 and 10 years is 0% and 17.5%. As you can see, the 10 year growth in dividends was very good. They were right to cut dividends in 2009. I do not like companies that pay out dividends they cannot afford. In 2011, the dividends were increased by 10% and this is a good raise. The Payout Ratios are currently in a reasonable range.

For this stock, growth was negative in 2009 and it was not a good year. However, 2010 was a much better year. Revenue, cash flow and earnings all improved in 2010. Still the 5 year growth for these items was negative, with the 10 year growth for these items being 0 or mediocre. Revenue growth for the last 10 years was 0%, cash flow was 5.6% per year and earnings, being the best, were 8.2% per year.

There was some better, but not great, statistics. Book value over the past 5 and 10 years has grown at the rate of 3.8% and 7% per year, respectively. Return on equity for 2010 was a respectable 9.1%. The 5 year median ROE was better at 12.6%.

The Debt Ratios has been very good, especially over the past 5 years. The current Liquidity Ratio is 3.75 and the current Asset/Liability 2.17. These are both excellent. The Leverage Ratio is currently at 1.92 and the Debt/Equity Ratio is currently at 0.89. These are also good ratios.

Currently, I am holding on to the shares I have. This stock is not much of my portfolio and this is probably good, because it has not done very well for me. I am, however, keeping an eye on this stock.

This company does metal distribution and processing North America. It operates in three segments of metals service centers, energy tubular products and steel distributors under various names including Russel Metals, A. J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, JMS Russel Metals, Leroux Steel, McCabe Steel, Mégantic Métal, Métaux Russel, Métaux Russel Produits Spécialisés, Milspec, Norton Metals, Pioneer Pipe, Russel Metals Specialty Products, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis. Its web site is here Russel Metals. See my spreadsheet at rus.htm.

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. See my website for stocks followed and investment notes. Follow me on twitter.


  1. Interesting! I own a company who have a similar name, DNI Metals Inc. (DNI). I wish this one will hit the 20$+ like your Russel one day.

    By the way, I know you don't make investment recommendation here, but anyhow, your ATP is performing very well!

    Thanks for your wonderful review, your among the only online investor I trust. You rock! You have the number one investment blog in Canada - just the Globe and Mail know you beat them all - and you really do :0)

  2. Sunny:

    Thanks for your kind comments.