ASX:RWC

Stock Analysis Report

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.


Snowflake Analysis

Solid track record with excellent balance sheet.

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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-27.2%

RWC

0.7%

AU Building

0.02%

AU Market


1 Year Return

-30.1%

RWC

20.7%

AU Building

14.6%

AU Market

Return vs Industry: RWC underperformed the Australian Building industry which returned 20.6% over the past year.

Return vs Market: RWC underperformed the Australian Market which returned 14.6% over the past year.


Shareholder returns

RWCIndustryMarket
7 Day-27.2%0.7%0.02%
30 Day-23.0%1.1%0.2%
90 Day-14.9%4.6%5.4%
1 Year-28.5%-30.1%23.2%20.7%19.7%14.6%
3 Year33.0%22.1%19.6%12.9%38.7%20.2%
5 Yearn/a47.9%31.6%50.6%17.1%

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?

14.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RWC (A$4.65) is trading above our estimate of fair value (A$4.03)

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 (27.4x) compared to the Building industry average (16.2x).

PE vs Market: RWC is poor value based on its PE Ratio (27.4x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: RWC is poor value based on its PEG Ratio (2.5x)


Price to Book Ratio

PB vs Industry: RWC is overvalued based on its PB Ratio (2.6x) compared to the XX Building industry average (1.2x).


Next Steps

Future Growth

How is Reliance Worldwide forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

11.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RWC's forecast earnings growth (11% per year) is above the savings rate (1.1%).

Earnings vs Market: RWC's earnings (11% per year) are forecast to grow faster than the Australian market (9.3% per year).

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

Revenue vs Market: RWC's revenue (5.5% per year) is forecast to grow faster than the Australian market (4.2% per year).

High Growth Revenue: RWC's revenue (5.5% 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 (11.6%).


Next Steps

Past Performance

How has Reliance Worldwide performed over the past 5 years?

31.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RWC has high quality earnings.

Growing Profit Margin: RWC's current net profit margins (12%) are higher than last year (8.6%).


Past Earnings Growth Analysis

Earnings Trend: RWC's earnings have grown significantly by 31.7% per year over the past 5 years.

Accelerating Growth: RWC's earnings growth over the past year (101.6%) exceeds its 5-year average (31.7% per year).

Earnings vs Industry: RWC earnings growth over the past year (101.6%) exceeded the Building industry 4.6%.


Return on Equity

High ROE: RWC's Return on Equity (9.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Reliance Worldwide's financial position?


Financial Position Analysis

Short Term Liabilities: RWC's short term assets (A$542.8M) exceed its short term liabilities (A$143.6M).

Long Term Liabilities: RWC's short term assets (A$542.8M) exceed its long term liabilities (A$526.3M).


Debt to Equity History and Analysis

Debt Level: RWC's debt to equity ratio (35.3%) is considered satisfactory.

Reducing Debt: RWC's debt to equity ratio has increased from 9.8% to 35.3% over the past 5 years.

Debt Coverage: RWC's debt is well covered by operating cash flow (27.4%).

Interest Coverage: RWC's interest payments on its debt are well covered by EBIT (8.9x coverage).


Balance Sheet

Inventory Level: RWC has a high level of physical assets or inventory.

Debt Coverage by Assets: RWC's debt is covered by short term assets (assets are 1.1x debt).


Next Steps

Dividend

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

3.80%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: RWC's dividend (2.8%) is higher than the bottom 25% of dividend payers in the Australian market (2.29%).

High Dividend: RWC's dividend (2.8%) is low compared to the top 25% of dividend payers in the Australian market (5.35%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, RWC has been paying a dividend for less than 10 years.

Growing Dividend: RWC's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (69%), RWC's dividend 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 (50.2% payout ratio).


Next Steps

Management

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

5.4yrs

Average management tenure


CEO

Heath Sharp 0

4.7yrs

Tenure

AU$3,005,366

Compensation

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


CEO Compensation Analysis

Compensation vs Market: Heath's total compensation ($USD1.99M) is about average for companies of similar size in the Australian market ($USD2.22M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Heath Sharp
Group CEO4.7yrsAU$3.01m0.15% A$5.6m
Gerry Bollman
Global Chief Financial Officer3.2yrsAU$2.00mno data
Philip King
Group Investor Relations Director0.8yrsno datano data
Dixon Thuston
Vice President of Stream labs & OEM Sales0yrsno datano data
Bill Kluss
Chief Manufacturing Officer9.1yrsno datano data
Sean McClenaghan
Chief Executive Officer of USA6.1yrsno datano data
Brad Reid
Chief Executive Officer of Australia and New Zealand13.1yrsno datano data
David Succurro
Chief Executive Officer of Canada10.1yrsno datano data
David Neufeld
Company Secretary3.8yrsno datano data

5.4yrs

Average Tenure

Experienced Management: RWC's management team is seasoned and experienced (5.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Heath Sharp
Group CEO4.7yrsAU$3.01m0.15% A$5.6m
Ross Dobinson
Independent Non-Executive Director3.8yrsAU$130.00k0.0042% A$151.0k
William Crosby
Independent Non-Executive Chairman0.9yrsAU$204.08k0.019% A$699.9k
Russell Chenu
Independent Non-Executive Director3.8yrsAU$120.00k0.020% A$721.7k
Christine Bartlett
Independent Non-Executive Director0.3yrsno data0.0026% A$93.2k
Sharon McCrohan
Independent Non-Executive Director2yrsAU$130.00kno data

2.9yrs

Average Tenure

67yo

Average Age

Experienced Board: RWC's board of directors are not considered experienced ( 2.9 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 been diluted in the past year, with total shares outstanding growing by 45.8%.


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$3.640b
  • Shares outstanding: 782.70m
  • Website: https://www.rwc.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RWCASX (Australian Securities Exchange)YesOrdinary SharesAUAUDApr 2016
RWCCHIA (Chi-X Australia)YesOrdinary SharesAUAUDApr 2016
0EUDB (Deutsche Boerse AG)YesOrdinary SharesDEEURApr 2016
RLLW.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDApr 2016

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 industrial applications. It offers fittings and pipes, including plumbing fittings, piping, and related products for the installation and repair of water reticulation systems; pipe support systems; and firestop solutions. The company also provides control valves, such as temperature and pressure relief valves for domestic and commercial storage hot water systems; non-return isolating valves; pressure regulation valves; backflow prevention devices; and specialist water safety valves. In addition, it offers thermostatic products comprising a range of thermostatic mixing valves, tempering valves, and thermostatic cartridges; and other products, which include underfloor heating components and kit systems, and water meters, including pneumatic and hydraulic fittings, water mains connection fittings, and repair sleeves and fire safety system products. The company provides its products under the SharkBite, JG Speedfit, HoldRite, CashAcme, Reliance Valves, StreamLabs, and John Guest brands. It has operations in Australia, New Zealand, Korea, China, the United States, Canada, the United Kingdom, Spain, Italy, Germany, France, the Czech Republic, and Poland. Reliance Worldwide Corporation Limited was founded in 1949 and is headquartered in Atlanta, Georgia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/24 11:00
End of Day Share Price2020/02/24 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


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.