I own this stock of Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF). I initially bought this stock in 2007 because it was recommended 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. This stock has been much recommended by MPL Communications.
When I was updating my spreadsheet, I noticed most of the coloured ink is green. Dividend Payout Ratios have remained low with the DPR for 2018 at 21% with 5 year coverage at 20%. I have had this stock for almost 10 years and my total return is 16.69% per year with 15.01% from capital gains and 1.68% from dividends. The dividend yield on my original cost is 4.08%.
Both the dividend yield is low and the dividend growth is low to moderate. The current dividend yield is 1.08% with 5, 10 and historical yields at 0.88%, 1.21% and 1.13%. The dividend increases have been inconsistent. See the chart below. They had moderate dividend growth in the past but only low growth over the past 5 years.
The Dividend Payout Ratios are good. The DPR for EPS for 2018 is 21% with 5 year coverage at 20%. The DPR for CFPS for 2018 is 16% with 5 year coverage at 17%.
Debt Ratios are very good. This company currently has no long term debt. They did have some at various points in the past. The Liquidity Ratio for 2018 is 4.64 with 5 year median of 4.40. The Debt Ratio for 2018 is 5.95 with 5 year median of 5.42. The Leverage and Debt/Equity Ratios for 2018 are 1.20 and 0.20 with 5 year medians at 1.22 and 0.22.
The Total Return per year is shown below for years of 5 to 25 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.
|From||Years||Div. Gth||Tot Ret||Cap Gain||Div.|
The 5 year low, median, and high median Price/Earnings per Share Ratios are 19.44, 22.71 and 25.98. The corresponding 10 year ratios are 15.72, 18.50 and 21.27. The corresponding historical ratios are 13.05, 14.80 and 18.35. The current P/E Ratio is 18.58 based on a stock price of $23.23 and 2019 EPS estimate of 1.25. This stock price testing suggests that the stock price is relatively reasonable and around the median.
I get a Graham Price of $15.22. The 10 year low, median, and high median Price/Graham Price Ratios are 1.33, 1.56 and 1.80. The current P/GP Ratio is 1.53 based on a stock price of $23.23. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Book Value per Share Ratio of 2.97. The current P/B Ratio is 2.82 based on a Book Value of $470M, Book Value per Share of $8.23 and a stock price of $23.23. The current ratio is 5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of $1.13. The current dividend yield is 1.08% based on Dividends of $0.24 and a stock price of $23.23. The current dividend is 4.8% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10 year median Price/Sales (Revenue) Ratio is 1.44. The current P/S Ratio is 1.27 based on 2019 Revenue estimate of $1,044M, Revenue per Share of $18.28 and a stock price of $23.23. The current ratio is 12% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is probably reasonable and below the median. The P/S Ratio test is important on Consumer stocks. Most of the other tests, except for the dividend yield one agree. At least the current yield is above 1% as I do not buy a stock with dividend yield below 1%.
When I look at analysts’ recommendations, I find only one analyst following this stock and the recommendation is a Buy, so the consensus would be a Buy. The 12 months stock price consensus is $29.00. This implies a total return of 25.91% with 24.84% from capital gains and 1.08% from dividends based on a current stock price of $23.23.
See what analysts are saying about this stock on Stock Chase. It is generally well thought of but some think it is a bit pricey. Nelson Smith on Motley Fool thinks this is a great stock. A writer on Simply Wall Street talks about this stock’s low Beta. Hazel Jackson on Thorold News talk about expected EPS for the next quarter.
Richelieu Hardware Ltd is a Canada-based company that imports, manufactures, and distributes specialty hardware and complementary products. Headquartered in Montreal, the company operates across Canada and the eastern and midwestern regions of the United States. The majority of the company's sales are derived from its operations in Canada. 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 Melcor Developments Inc. (TSX-MRD, OTC-MODVF) ... learn more on Monday, March 18, 2019 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.
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