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REH

Reece ASX:REH Stock Report

Last Price

AU$14.14

Market Cap

AU$9.1b

7D

-4.0%

1Y

-25.1%

Updated

25 Sep, 2022

Data

Company Financials +
REH fundamental analysis
Snowflake Score
Valuation0/6
Future Growth1/6
Past Performance4/6
Financial Health5/6
Dividends2/6

REH Stock Overview

Reece Limited engages in the distribution of plumbing, bathroom, heating, ventilation, air-conditioning, waterworks, and refrigeration products in Australia, the United States, and New Zealand.

Rewards

Earnings are forecast to grow 3.73% per year

Earnings have grown 11.4% per year over the past 5 years

Risk Analysis

No risks detected for REH from our risk checks.

Reece Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Reece
Historical stock prices
Current Share PriceAU$14.14
52 Week HighAU$28.47
52 Week LowAU$12.93
Beta0.59
1 Month Change-12.55%
3 Month Change-3.68%
1 Year Change-25.15%
3 Year Change31.41%
5 Year Change64.94%
Change since IPO5,075.70%

Recent News & Updates

Sep 17
Here's Why We Think Reece (ASX:REH) Might Deserve Your Attention Today

Here's Why We Think Reece (ASX:REH) Might Deserve Your Attention Today

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks...

Sep 01
Reece (ASX:REH) Is Paying Out A Larger Dividend Than Last Year

Reece (ASX:REH) Is Paying Out A Larger Dividend Than Last Year

Reece Limited's ( ASX:REH ) dividend will be increasing from last year's payment of the same period to A$0.15 on 26th...

Shareholder Returns

REHAU Trade DistributorsAU Market
7D-4.0%-3.8%-2.7%
1Y-25.1%-21.6%-11.0%

Return vs Industry: REH underperformed the Australian Trade Distributors industry which returned -21.6% over the past year.

Return vs Market: REH underperformed the Australian Market which returned -11% over the past year.

Price Volatility

Is REH's price volatile compared to industry and market?
REH volatility
REH Average Weekly Movement5.3%
Trade Distributors Industry Average Movement5.4%
Market Average Movement9.6%
10% most volatile stocks in AU Market16.9%
10% least volatile stocks in AU Market4.3%

Stable Share Price: REH is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: REH's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19199,000Peter Wilsonhttps://www.reece.com.au

Reece Limited engages in the distribution of plumbing, bathroom, heating, ventilation, air-conditioning, waterworks, and refrigeration products in Australia, the United States, and New Zealand. The company also distributes irrigation and pools, fire, and kitchen products. It serves customers in the trade, retail, commercial, and infrastructure markets.

Reece Fundamentals Summary

How do Reece's earnings and revenue compare to its market cap?
REH fundamental statistics
Market CapAU$9.13b
Earnings (TTM)AU$392.49m
Revenue (TTM)AU$7.65b

23.3x

P/E Ratio

1.2x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
REH income statement (TTM)
RevenueAU$7.65b
Cost of RevenueAU$5.52b
Gross ProfitAU$2.14b
Other ExpensesAU$1.75b
EarningsAU$392.49m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.61
Gross Margin27.94%
Net Profit Margin5.13%
Debt/Equity Ratio32.8%

How did REH perform over the long term?

See historical performance and comparison

Dividends

1.6%

Current Dividend Yield

37%

Payout Ratio

Does REH pay a reliable dividends?

See REH dividend history and benchmarks
When do you need to buy REH by to receive an upcoming dividend?
Reece dividend dates
Ex Dividend DateOct 11 2022
Dividend Pay DateOct 26 2022
Days until Ex dividend15 days
Days until Dividend pay date30 days

Does REH pay a reliable dividends?

See REH dividend history and benchmarks
We’ve recently updated our valuation analysis.

Valuation

Is REH undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for REH?

Other financial metrics that can be useful for relative valuation.

REH key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.4x
Enterprise Value/EBITDA15.3x
PEG Ratio6.2x

Price to Earnings Ratio vs Peers

How does REH's PE Ratio compare to its peers?

REH PE Ratio vs Peers
The above table shows the PE ratio for REH vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average15.9x
SVW Seven Group Holdings
15.8x14.7%AU$6.2b
EHL Emeco Holdings
6.9x9.8%AU$445.9m
IPG IPD Group
16.5x10.2%AU$182.9m
CYG Coventry Group
24.7x28.3%AU$119.4m
REH Reece
23.3x3.7%AU$9.1b

Price-To-Earnings vs Peers: REH is expensive based on its Price-To-Earnings Ratio (23.3x) compared to the peer average (15.9x).


Price to Earnings Ratio vs Industry

How does REH's PE Ratio compare vs other companies in the Global Trade Distributors Industry?

Price-To-Earnings vs Industry: REH is expensive based on its Price-To-Earnings Ratio (23.3x) compared to the Global Trade Distributors industry average (10.7x)


Price to Earnings Ratio vs Fair Ratio

What is REH's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

REH PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio23.3x
Fair PE Ratio19.7x

Price-To-Earnings vs Fair Ratio: REH is expensive based on its Price-To-Earnings Ratio (23.3x) compared to the estimated Fair Price-To-Earnings Ratio (19.7x).


Share Price vs Fair Value

What is the Fair Price of REH when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: REH (A$14.14) is trading above our estimate of fair value (A$12.6)

Significantly Below Fair Value: REH is trading above our estimate of fair value.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Reece forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


3.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: REH's forecast earnings growth (3.7% per year) is above the savings rate (1.8%).

Earnings vs Market: REH's earnings (3.7% per year) are forecast to grow slower than the Australian market (6.6% per year).

High Growth Earnings: REH's earnings are forecast to grow, but not significantly.

Revenue vs Market: REH's revenue (3.7% per year) is forecast to grow slower than the Australian market (3.7% per year).

High Growth Revenue: REH's revenue (3.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: REH's Return on Equity is forecast to be low in 3 years time (11%).


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Past Performance

How has Reece performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


11.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: REH has high quality earnings.

Growing Profit Margin: REH's current net profit margins (5.1%) are higher than last year (4.6%).


Past Earnings Growth Analysis

Earnings Trend: REH's earnings have grown by 11.4% per year over the past 5 years.

Accelerating Growth: REH's earnings growth over the past year (37.4%) exceeds its 5-year average (11.4% per year).

Earnings vs Industry: REH earnings growth over the past year (37.4%) underperformed the Trade Distributors industry 54.1%.


Return on Equity

High ROE: REH's Return on Equity (11.8%) is considered low.


Discover strong past performing companies

Financial Health

How is Reece's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: REH's short term assets (A$3.1B) exceed its short term liabilities (A$1.5B).

Long Term Liabilities: REH's short term assets (A$3.1B) exceed its long term liabilities (A$1.8B).


Debt to Equity History and Analysis

Debt Level: REH's net debt to equity ratio (26.2%) is considered satisfactory.

Reducing Debt: REH's debt to equity ratio has increased from 8.6% to 32.8% over the past 5 years.

Debt Coverage: REH's debt is well covered by operating cash flow (20.3%).

Interest Coverage: REH's interest payments on its debt are well covered by EBIT (8.4x coverage).


Balance Sheet


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Dividend

What is Reece current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


1.59%

Current Dividend Yield

Upcoming Dividend Payment

TodaySep 25 2022Ex Dividend DateOct 11 2022Dividend Pay DateOct 26 202215 days from Ex DividendBuy in the next 15 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: REH's dividend (1.59%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.78%).

High Dividend: REH's dividend (1.59%) is low compared to the top 25% of dividend payers in the Australian market (7.03%).


Stability and Growth of Payments

Stable Dividend: REH's dividend payments have been volatile in the past 10 years.

Growing Dividend: REH's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (37%), REH's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (670.4%), REH's dividend payments are not well covered by cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.2yrs

Average management tenure


CEO

Peter Wilson (54 yo)

14.67yrs

Tenure

AU$5,834,000

Compensation

Mr. Peter J. Wilson, B.Comm (Melb), FAIM, is Chief Executive Officer and Managing Director of Reece Limited (formerly known as Reece Australia Limited) since January 1, 2008, the start of a significant org...


CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD3.82M) is about average for companies of similar size in the Australian market ($USD2.95M).

Compensation vs Earnings: Peter's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: REH's management team is considered experienced (2.2 years average tenure).


Board Members

Experienced Board: REH's board of directors are considered experienced (6.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 80.15% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
24.33%
L.T. Wilson Pty Ltd.
157,200,000A$2.2b0%no data
9.29%
L.T.W. Holdings Pty. Ltd.
60,000,000A$848.4m0%no data
7.53%
Warramunda Investments Pty. Ltd.
48,645,000A$687.8m0%no data
6.26%
Leslie Wilson
40,407,580A$571.4m0%no data
6.21%
AustralianSuper Pty. Ltd.
40,123,317A$567.3m0%1.49%
5.29%
John Wilson
34,164,004A$483.1m74.1%no data
2.6%
J.G.W. Investments Pty Ltd
16,801,600A$237.6m0%no data
2.6%
W.A.L. Investments Pty Ltd.
16,801,600A$237.6m0%no data
2.6%
Florizel Investments Pty Ltd.
16,801,600A$237.6m0%no data
2.31%
Austral Hardware Pty Ltd
14,925,000A$211.0m0%no data
1.86%
Austral Hardware (Healville) Pty Ltd.
12,000,000A$169.7m0%no data
1.81%
The Vanguard Group, Inc.
11,672,873A$165.1m0.92%no data
1.35%
Wilaust Holdings Pty Ltd.
8,730,000A$123.4m0%no data
1.11%
Australian Foundation Investment Company Limited
7,201,316A$101.8m-0.02%1.57%
0.88%
Argo Investments Limited
5,687,741A$80.4m0%1.58%
0.86%
BlackRock, Inc.
5,524,986A$78.1m-1.86%no data
0.78%
Bruce Wilson
5,049,223A$71.4m-80.24%no data
0.41%
Tyara Pty. Ltd.
2,670,000A$37.8m0%no data
0.41%
Wal Assets Pty Ltd
2,670,000A$37.8m0%no data
0.41%
Abtourk (Vic No. 11) Pty Ltd
2,670,000A$37.8m0%no data
0.38%
Norges Bank Investment Management
2,475,495A$35.0m0%no data
0.25%
Van Eck Associates Corporation
1,610,831A$22.8m30.81%0.03%
0.22%
BetaShares Capital Limited
1,413,640A$20.0m4.78%0.17%
0.2%
Geode Capital Management, LLC
1,300,272A$18.4m1.32%no data
0.19%
Milton Corporation Limited
1,231,657A$17.4m0%1.07%

Company Information

Reece Limited's employee growth, exchange listings and data sources


Key Information

  • Name: Reece Limited
  • Ticker: REH
  • Exchange: ASX
  • Founded: 1919
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Implied Market Cap: AU$9.134b
  • Shares outstanding: 645.98m
  • Website: https://www.reece.com.au

Number of Employees


Location

  • Reece Limited
  • 57 Balmain Street
  • Cremorne
  • Victoria
  • 3121
  • Australia


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
REHASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
REHCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
REEC.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/25 00:00
End of Day Share Price2022/09/23 00:00
Earnings2022/06/30
Annual Earnings2022/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.