Richelieu Hardware Ltd.

On my other blog I am today writing about Dividend Payment Cycles continue...

Sound bite for Twitter and StockTwits is: Dividend growth consumer stock. I have done quite well with this stock and I am pleased with it. The only problem is the low dividend rate. This means that it will be one of the first for me to sell from the Registered Accounts. See my spreadsheet at rch.htm.

I own this stock of Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF). I initially bought this stock in 2007 because it was recommend by the Investment Reporter. It is not on any of the dividend lists, probably because they only started to pay dividends in 2000, they are a rather small company and they did not increase dividends in 2009.

Dividends are low and the increases are moderate. The current dividend is just 0.98%. The 5 year median is 1.38%. The 5 and 10 year growth in dividends is at 11.8% and 13.4% per year. The company has been paying dividends since 2002. The most recent dividend increases was in 2015 and the increase was for 7.1%.

The Dividend Payout Ratios are low. The 2014 DPR for EPS is at 21.3% and the 5 year median for EPS is 22.3%. The DPR for CFPS for 2014 is at 18.2% and the 5 year median DPR for CFPS is at 18.3%.

For the shares I bought in 2009, I am currently earning 3.3% on my original purchase. For the shares I bought in 2007, I am currently earning 2.5% on my original purchase. This is because the shares I bought in 2009 were cheaper than the shares I bought in 2007.

I have made a total return of 21.86% per year with 20.52% per year from capital gains and 1.34% per year from dividends. The 5 and 10 year total returns today is 16.18% and 11.03% per year with 14.89% and 9.95% per year from capital gains and 1.295 and 1.09% per year from dividends.

The outstanding shares have decreased over the past while. In the last 5 and 10 years, outstanding shares have decreased by 2.1% and 1.6% per year. Shares have increased for Stock Options and decreased for Buy Backs. This means that things like Revenue are more important than Revenue per Share. Growth is better over the past 5 years than over the past 10 years.

Revenue growth has been mostly quite good. Revenue has grown at 8.8% and 7.3% per year over the past 5 and 10 years. Revenue per Share is up by 11.2% and 9.1% per year over the past 5 and 10 years.

Earnings growth is also quite good. The EPS growth is 13.8% and 8.9% per year over the past 5 and 10 years. Net Income has grown at 11.5% and 7.2% per year over the past 5 and 10 years.

Cash Flow good has also been quite good. The Cash Flow growth is at 10.1% and 7.3% per year over the past 5 and 10 years. CFPS is up by 12.4% and 9.1% per year over the past 5 and 10 years.

Return on Equity seems always to have been good and ROE has been above 10% each year over the past 10 years and even over the past 20 years. ROE for 2014 is 16.7% and the 5 year median is 15.8%. The ROE on Comprehensive Income is also good with the value for 2014 at 18.5% and the 5 year median at 15.6%. When the ROE on Comprehensive Income is close to that of Net Income it suggests that the earnings are of good quality.

Another good thing about this stock is that the debt ratios are very good. The Liquidity Ratio is 4.05 and the Debt Ratio is 5.06. The Leverage and Debt/Equity Ratios are 1.25 and 0.25, respectively. This is a good quality to have in a retail stock because it means that the company can survive the bad times.

This is the first of two parts. The second part will be posted on Thursday, March 26, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

This company is a distributor, importer and manufacturer of specialty hardware and complementary products. Its products are kitchen and bathroom cabinets, furniture, and window and door. It is also involved with residential and commercial woodworking industry. It has a large customer base of hardware retailers. Its web site is here Richelieu Hardware.

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.

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