I own this stock of Russel Metals Inc (TSX-RUS, OTC-RUSMF). 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.
When I was updating my spreadsheet, I noticed it has been doing better over the last couple of years. The 2018 financial year was a robust one, but analysts all seem to expect a decline in revenue and earnings for 2019.
Dividends have gone up and down and have been suspended. They paid dividends from 1990 to 1992, then suspended them for 7 years until 1990. There have been big increases some years (118% in 2004) and big decreases in other years (44% in 2009). The dividends have been flat since 2015 and analysts do not expect any increase in dividend over the next couple of years.
The current dividend yield is good (5% or higher) and it is often good, but some years it is in the moderate range (2% to 4% ranges). The current dividend is 6.35%. The 5, 10 and historical yields are 5.81%, 5.47% and 4.94%.
The Dividend Payout Ratios are currently fine, but for a few years it was over 100% and the 5 year coverage is still over 100%. The current DPR for EPS for 2018 is 43% with 5 year coverage at 107%. The DPR for EPS for 2019 is expected to be around 60%. The DPR for CFPS for 2018 is 26% with 5 year coverage at 44%.
Debt Ratios are for this company has always been fairly good. The Long Term Debt/Market Cap Ratio for 2018 is 0.33. The Liquidity Ratio is quite good at 2.74 with 5 year median at 2.91. The Debt Ratio is good at 1.90 with 5 year median at 1.90. The Leverage and Debt/Equity Ratios is fine at 2.12 and 1.12 with better 5 year medians at 1.97 and 0.97.
The Total Return per year is shown below for years of 5 to 28 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.
Shareholders have done fine over the longer term.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 1.66% | -1.85% | -7.44% | 5.59% |
| 2008 | 10 | -1.68% | 7.72% | 1.16% | 6.55% |
| 2003 | 15 | 10.95% | 17.02% | 6.09% | 10.93% |
| 1998 | 20 | 11.93% | 19.69% | 9.46% | 10.23% |
| 1993 | 25 | 11.93% | 8.36% | 3.87% | 4.49% |
| 1990 | 28 | 5.38% | 8.82% | 4.53% | 4.29% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.00, 13.35 and 14.71. The corresponding 10 year ratios are 12.49, 14.53 and 16.16. The corresponding historical ratios are 8.22, 9.69 and 11.17. The current P/E Ratio is 9.73 based on a stock price of $24.41 and 2019 EPS estimate of $2.51. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $30.23. The 10 year low, median, and high median Price/Graham Price Ratios are 0.89, 1.10 and 1.29. The current P/GP Ratio is 0.81 based on a stock price of $24.41. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 1.83. The current ratio is 1.51 based on Book Value of $1005M, Book Value per Share of $16.18 and a stock price of $24.41. The current ratio is 17% below the 10 year 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 4.94%. The current dividend yield is 6.23% based on dividends of $1.52 and a stock price of $24.41. The current yield is 26% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10 year median Price/Sales (Revenue) Ratio is 0.54. The current P/S Ratio is 0.38 based on a stock price of $24.41, Revenue estimate for 2019 of $3,347 and Revenue per Share of $63.55. The current ratio is some 29% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is mostly that the stock price is relatively cheap. The only test that says otherwise is the P/B Ratio test. The Book Value has been falling over the past 10 years.
When I look at analysts’ recommendations, I find Buy (3) and Hold (1) recommendations. The consensus would be a Buy. The 12 month stock price is $29.88. This implies a total return of $28.64% with 22.41% from capital gains and 6.23% from dividends.
See what analysts are saying on Stock Chase. They are a cyclical business that has been hurt metal tariffs. Kris Knutson on Motley Fool says it is a small, semi-speculative dividend play. A writer on Simply Wall Street says that the company can easily cover their debt payments. Caroline Biscotti on Southgate Observer gives some stats on this company.
Russel Metals Inc is a Canada-based metal distribution company. The company conducts business primarily through three metals distribution segments: metals service centers; energy 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 Supremex Inc (TSX-SXP, OTC-SUMXF) ... learn more on Wednesday, April 10, 2019 around 5 pm. Tomorrow on my other blog I will write about Mutual Fund Investors.... learn more on Tuesday, April 09, 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.
No comments:
Post a Comment