ASX:RWC

Stock Analysis Report

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Market Cap

AU$4.4b

Last Updated

2021/08/03 18:02 UTC

Data Sources

Company Financials +

Executive Summary

Reliance Worldwide Corporation Limited, together with its subsidiaries, designs, manufactures, and supplies water flow, control, and monitoring products and solutions for residential, commercial, and industrial applications. More Details

Rewards

Earnings are forecast to grow 7.45% per year

Earnings have grown 30.8% per year over the past 5 years

Risk Analysis

No risks detected for RWC from our risk checks.


Snowflake Analysis

Excellent balance sheet with acceptable track record.

Share Price & News

How has Reliance Worldwide's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RWC is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: RWC's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

3.3%

RWC

1.4%

AU Building

0.7%

AU Market


1 Year Return

113.2%

RWC

52.8%

AU Building

27.2%

AU Market

Return vs Industry: RWC exceeded the Australian Building industry which returned 52.8% over the past year.

Return vs Market: RWC exceeded the Australian Market which returned 27.2% over the past year.


Shareholder returns

RWCIndustryMarket
7 Day3.3%1.4%0.7%
30 Day8.2%4.5%2.4%
90 Day8.8%7.3%5.2%
1 Year117.7%113.2%55.0%52.8%31.9%27.2%
3 Year2.4%-3.9%84.7%72.3%35.7%19.1%
5 Year102.0%78.9%109.9%87.7%66.2%33.8%

Long-Term Price Volatility Vs. Market

How volatile is Reliance Worldwide's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Reliance Worldwide undervalued compared to its fair value and its price relative to the market?

33.95x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: RWC (A$5.67) is trading above our estimate of fair value (A$5.02)

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


Price To Earnings Ratio

PE vs Industry: RWC is poor value based on its PE Ratio (33.9x) compared to the Global Building industry average (17.8x).

PE vs Market: RWC is poor value based on its PE Ratio (33.9x) compared to the Australian market (20.2x).


Price to Earnings Growth Ratio

PEG Ratio: RWC is poor value based on its PEG Ratio (4.6x)


Price to Book Ratio

PB vs Industry: RWC is overvalued based on its PB Ratio (3x) compared to the XX Building industry average (1.7x).


Future Growth

How is Reliance Worldwide forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

7.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RWC's forecast earnings growth (7.5% per year) is above the savings rate (1.9%).

Earnings vs Market: RWC's earnings (7.5% per year) are forecast to grow slower than the Australian market (13.1% per year).

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

Revenue vs Market: RWC's revenue (4.4% per year) is forecast to grow slower than the Australian market (5% per year).

High Growth Revenue: RWC's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RWC's Return on Equity is forecast to be low in 3 years time (14.1%).


Past Performance

How has Reliance Worldwide performed over the past 5 years?

30.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RWC has high quality earnings.

Growing Profit Margin: RWC's current net profit margins (10.6%) are higher than last year (10.4%).


Past Earnings Growth Analysis

Earnings Trend: RWC's earnings have grown significantly by 30.8% per year over the past 5 years.

Accelerating Growth: RWC's earnings growth over the past year (11.5%) is below its 5-year average (30.8% per year).

Earnings vs Industry: RWC earnings growth over the past year (11.5%) underperformed the Building industry 26.7%.


Return on Equity

High ROE: RWC's Return on Equity (8.8%) is considered low.


Financial Health

How is Reliance Worldwide's financial position?


Financial Position Analysis

Short Term Liabilities: RWC's short term assets (A$558.8M) exceed its short term liabilities (A$222.7M).

Long Term Liabilities: RWC's short term assets (A$558.8M) exceed its long term liabilities (A$416.6M).


Debt to Equity History and Analysis

Debt Level: RWC's debt to equity ratio (17.9%) is considered satisfactory.

Reducing Debt: RWC's debt to equity ratio has increased from 2.3% to 17.9% over the past 5 years.

Debt Coverage: RWC's debt is well covered by operating cash flow (94.7%).

Interest Coverage: RWC's interest payments on its debt are well covered by EBIT (15.9x coverage).


Balance Sheet


Dividend

What is Reliance Worldwide current dividend yield, its reliability and sustainability?

1.50%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: RWC's dividend (1.5%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (1.95%).

High Dividend: RWC's dividend (1.5%) is low compared to the top 25% of dividend payers in the Australian market (4.99%).


Stability and Growth of Payments

Stable Dividend: RWC has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: RWC's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (76.5%), RWC's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RWC's dividends in 3 years are forecast to be covered by earnings (53.5% payout ratio).


Next Steps

Management

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

6.2yrs

Average management tenure


CEO

Heath Sharp

6.17yrs

Tenure

AU$3,408,377

Compensation

Mr. Heath Sharp serves as Group Managing Director of Reliance Worldwide Corporation Limited and serves as its Group Chief Executive Officer since June 2015. Prior to this, Mr. Sharp served as President of ...


CEO Compensation Analysis

Compensation vs Market: Heath's total compensation ($USD2.51M) is above average for companies of similar size in the Australian market ($USD1.70M).

Compensation vs Earnings: Heath's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: RWC's management team is seasoned and experienced (6.2 years average tenure).


Board Members

Experienced Board: RWC's board of directors are not considered experienced ( 2.4 years average tenure), which suggests a new board.


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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

Reliance Worldwide Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Reliance Worldwide Corporation Limited
  • Ticker: RWC
  • Exchange: ASX
  • Founded: 1949
  • Industry: Building Products
  • Sector: Capital Goods
  • Market Cap: AU$4.441b
  • Shares outstanding: 783.18m
  • Website: https://www.rwc.com

Number of Employees


Location

  • Reliance Worldwide Corporation Limited
  • 2300 Defoor Hills Road NW
  • Atlanta
  • Georgia
  • 30318
  • United States

Listings


Biography

Reliance Worldwide Corporation Limited, together with its subsidiaries, designs, manufactures, and supplies water flow, control, and monitoring products and solutions for residential, commercial, and indus...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/08/03 18:02
End of Day Share Price2021/08/03 00:00
Earnings2020/12/31
Annual Earnings2020/06/30


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.