Richelieu Hardware Ltd

Sound bite for Twitter and StockTwits is: Dividend growth consumer. This stock is testing as expensive on all my tests. Personally I would not buy a stock with a yield under 1%. However, this is still a very good company. See my spreadsheet on Richelieu Hardware Ltd.

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. This stock would be considered to be a dividend paying growth stock. In 2009, I thought I would add to what I had in this stock.

You can see from all the green on the spreadsheet that this stock has done well on a number of things that I track. This stock is not only increasing it dividends but also buying back shares. Outstanding shares have declined by 1.5% and 1.8% per year over the past 5 and 10 years.

I bought this stock for my trading account in 2009. To date I have a total return of 22.13% with 20.59% from capital gain and 1.54% from dividends. Although the dividend yield tends to be low on this stock, I bought it in 2009 the one year they did not raise their dividend with a yield of 1.74%. I am now earning 3.92% on my initial purchase money.

Dividend yields are low with the current dividend yield at 0.78% and the 5 year median at 0.93%. The historical median and 10 year median are better at 1.15% and 1.34% respectively. I waited to buy this stock until it had a dividend yield over 1%.

The dividends have been paid for 15 years and I have dividend growth for 5, 10 and 15 years. Dividend growth is at 7.23%, 9.29% and 12.92% per year over these periods. The last dividend increase was for 5.82% and this was in 2018. Dividend increases seem to be getting lower.

They can certainly afford their dividends. The Dividend Payout Ratio for 2017 was 19.7% and the 5 year coverage is 20.7%. The DPR for CFPS is 16.4% with 5 year coverage of 17.4%.

Let's look at long term Total Return for this company. I have Total Return for 5, 10, 15, 20 and 24 year periods. The Total Return for these periods is 23.82%, 16.63%, 14.91%, 20.82% and 18.32%. The portion of this Total Return attributable to capital gains is 22.73%, 15.59%, 13.90%, 19.58% and 17.47% per year. The portion of this Total Return attributable to dividends is 1.10% %, 1.04%, 1.01%, 1.24% and 0.86% per year.

Do not forget in looking at this that dividends have only been paid for the past 15 years. However, dividends are low on this stock and have always been. I cannot see this changing.

The 5 year low, median and high median Price/Earnings per Share Ratios are 18.86, 21.64 and 24.41. The corresponding 10 year ratios are 14.21, 16.46 and 18.73. The corresponding historical ratios are 12.95, 14.71 and 17.18. It would seem the some of the stock price increase is coming from P/E Ratio increases. The current P/E Ratio is 23.81 based on 2018 EPS estimate of $1.29 and a stock price of $30.71. This stock price testing suggests that the stock price is relatively expensive.

I get a Graham Price of $14.76. The 10 year low, median and high median Price/Graham Price Ratios are 1.16, 1.36 and 1.56. The current P/GP Ratio is 2.08 based on a stock price of $30.71. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 2.55. The current P/B Ratio is 4.09 based on Book Value of $434M, Book Value per Share of $7.51 and a stock price of 30.71. The current P/B Ratios is some 61% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

The historical median dividend yield is 1.15%. The current dividend yield is 0.78% based on dividends of $0.24 and a stock price of $30.71. The current yield is some 32% lower than this historical median yield. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Sales (Revenue) Ratio is 1.30. The current P/S Ratios is 1.74 based on 2018 Revenue Estimate of $1022M, Revenue per Share of $17.68 and a stock price of $30.71. The current P/S Ratio is some 33% higher than the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

When I look at analysts' recommendations I find Buy (1) and Hold (1) recommendations. The consensus would be a Buy. The 12 month stock price is $36.00. This implies a total return of 18.01% with 17.23% from capital gains and 0.78% from dividends.

Joseph Holm on Simply Wall Street thinks that lately this company has not been doing as well as it peers. Nellie Frank on Frisco Fastball shows that this is not much analysts coverage for this stock. A Street Contributor on Wall Street Herald shows a number of scores for this company and a score of 51 for Value Composite One which shows that the company is neither over or under valued.

Richelieu Hardware Ltd distributes, imports & manufactures specialty hardware & complementary products. Its products include kitchen cabinet, glass hardware, decorative and functional panels, door & window components, and veneer sheets & edge banding. Its web site is here Richelieu Hardware Ltd.

The last stock I wrote about was about was Goodfellow Inc. (TSX-GDL, OTC-GFELF)... learn more. The next stock I will write about will be Enbridge Inc. (TSX-ENB, NYSE-ENB)... learn more on Friday, March 16, 2018 around 5 pm. Tomorrow on my other blog I will write about Real Estate Stock... learn more on Thursday, March 15, 2018 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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.