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

Fundamentals

Excellent balance sheet with solid 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


Market Performance


7 Day Return

8.0%

RWC

2.0%

AU Building

0.7%

AU Market


1 Year Return

-16.0%

RWC

-11.1%

AU Building

11.0%

AU Market

Return vs Industry: RWC underperformed the Australian Building industry which returned -11.1% over the past year.

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


Shareholder returns

RWCIndustryMarket
7 Day8.0%2.0%0.7%
30 Day5.3%0.06%-0.2%
90 Day18.6%7.7%-0.1%
1 Year-14.2%-16.0%-8.7%-11.1%17.4%11.0%
3 Year50.0%37.7%31.5%17.5%36.3%18.0%
5 Yearn/a51.1%34.1%51.4%17.3%

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?

24.77x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: RWC (A$4.2) is trading above our estimate of fair value (A$3.45)

Significantly Undervalued: 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 (24.8x) compared to the Building industry average (18.7x).

PE vs Market: RWC is poor value based on its PE Ratio (24.8x) compared to the Australian market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: RWC is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: RWC is overvalued based on its PB Ratio (2.3x) compared to the XO Building industry average (2.2x).


Next Steps

Future Growth

How is Reliance Worldwide forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

13.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RWC's forecast earnings growth (13.6% per year) is above the savings rate (2.3%).

Earnings vs Market: RWC's earnings (13.6% per year) are forecast to grow faster than the Australian market (10.2% per year).

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

Revenue vs Market: RWC's revenue (5.7% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: RWC's revenue (5.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: RWC's Return on Equity is forecast to be low in 3 years time (12%).


Next Steps

Past Performance

How has Reliance Worldwide performed over the past 5 years?

31.7%

Historical annual earnings growth


Earnings and Revenue History


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 -11.9%.


Return on Equity

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


Return on Assets

ROA vs Industry: RWC has a higher Return on Assets than the Building industry average last year.


Return on Capital Employed

ROCE Improving: RWC has significantly improved its Return on Capital Employed over the past 3 years.


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) exceeds its short term liabilities (A$143.6M)

Long Term Liabilities: RWC's short term assets (542.8M) exceeds its long term liabilities (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 1.094620x debt).


Next Steps

Dividend

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

3.10%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%2.5%markettop25%5.6%industryaverage2.2%forecastin3Years2.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: RWC's dividend (3.1%) is higher than the bottom 25% of dividend payers in the Australian market (2.49%).

High Dividend: RWC's dividend (3.1%) is low compared to the top 25% of dividend payers in the Australian market (5.56%).

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 well covered by earnings (49.1% payout ratio).


Next Steps

Management

What is the CEO of Reliance Worldwide's salary, the management and board of directors tenure and is there insider trading?

5.0yrs

Average management tenure


CEO

Heath Sharp 0

4.3yrs

Tenure

AU$2,907,311

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 ($USD1.97M) is about average for companies of similar size in the Australian market ($USD1.43M).

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


Management Age and Tenure

5.0yrs

Average Tenure

Experienced Management: RWC's management team is seasoned and experienced (5 years average tenure).


Board Age and Tenure

3.5yrs

Average Tenure

67yo

Average Age

Experienced Board: RWC's board of directors are considered experienced (3.5 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyAU$78,686,90223 Aug 19
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BuyAU$028 Feb 19
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SellAU$028 Feb 19
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SellAU$008 Feb 19
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SellAU$030 Jan 19
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SellAU$030 Jan 19
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SellAU$030 Jan 19
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Ownership Breakdown


Management Team

  • Sean McClenaghan

    Chief Executive Officer of USA

    • Tenure: 5.8yrs
  • Gerry Bollman

    Global Chief Financial Officer

    • Tenure: 2.8yrs
    • Compensation: AU$1.79m
  • Phil King

    Group Investor Relations Director

    • Tenure: 0.4yrs
  • Heath Sharp

    Group CEO

    • Tenure: 4.3yrs
    • Compensation: AU$2.91m
  • Brad Reid

    Chief Executive Officer of Australia and New Zealand

    • Tenure: 12.8yrs
  • David Succurro

    Chief Executive Officer of Canada

    • Tenure: 9.8yrs
  • Bill Kluss

    Chief Manufacturing Officer

    • Tenure: 8.8yrs
  • Dixon Thuston

    Vice President of Stream labs & OEM Sales

    • Tenure: 0yrs
  • David Neufeld

    Company Secretary

    • Tenure: 3.5yrs

Board Members

  • Ross Dobinson (67yo)

    Independent Non-Executive Director

    • Tenure: 3.5yrs
    • Compensation: AU$120.00k
  • William Crosby (62yo)

    Independent Non-Executive Chairman

    • Tenure: 0.6yrs
    • Compensation: AU$120.00k
  • Russell Chenu (67yo)

    Independent Non-Executive Director

    • Tenure: 3.5yrs
    • Compensation: AU$120.00k
  • Heath Sharp

    Group CEO

    • Tenure: 4.3yrs
    • Compensation: AU$2.91m
  • Sharon McCrohan

    Independent Non-Executive Director

    • Tenure: 1.7yrs
    • Compensation: AU$40.92k

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$3.201b
  • 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 indus ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/16 10:39
End of Day Share Price2019/10/16 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.