TSX:RUS

Stock Analysis Report

Executive Summary

Russel Metals Inc. distributes steel and metal products in North America.

Rewards

Trading at 27.2% below its fair value

Earnings are forecast to grow 10.14% per year

Pays a high and reliable dividend of 6.75%

Risk Analysis

Has a high level of debt

Profit margins (3.3%) are lower than last year (5.2%)



Snowflake Analysis

6 star dividend payer and good value.


Similar Companies

WESCO International

NYSE:WCC

Share Price & News

How has Russel Metals's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RUS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.1%

RUS

-0.8%

CA Trade Distributors

-0.08%

CA Market


1 Year Return

6.9%

RUS

10.4%

CA Trade Distributors

10.8%

CA Market

Return vs Industry: RUS underperformed the Canadian Trade Distributors industry which returned 10.4% over the past year.

Return vs Market: RUS underperformed the Canadian Market which returned 10.8% over the past year.


Shareholder returns

RUSIndustryMarket
7 Day0.1%-0.8%-0.08%
30 Day0%-3.0%0.01%
90 Day4.5%2.7%1.2%
1 Year14.4%6.9%14.0%10.4%14.4%10.8%
3 Year-0.4%-16.7%14.4%4.9%15.0%4.6%
5 Year22.2%-11.2%50.6%27.7%40.1%19.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Russel Metals undervalued compared to its fair value and its price relative to the market?

27.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RUS (CA$22.53) is trading below our estimate of fair value (CA$30.94)

Significantly Below Fair Value: RUS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RUS is good value based on its PE Ratio (10.8x) compared to the Trade Distributors industry average (13.8x).

PE vs Market: RUS is good value based on its PE Ratio (10.8x) compared to the Canadian market (15.1x).


Price to Earnings Growth Ratio

PEG Ratio: RUS is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: RUS is overvalued based on its PB Ratio (1.4x) compared to the CA Trade Distributors industry average (0.8x).


Next Steps

Future Growth

How is Russel Metals forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

10.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RUS's forecast earnings growth (10.1% per year) is above the savings rate (1.4%).

Earnings vs Market: RUS's earnings (10.1% per year) are forecast to grow slower than the Canadian market (10.5% per year).

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

Revenue vs Market: RUS's revenue is expected to decline over the next 3 years (-1.6% per year).

High Growth Revenue: RUS's revenue is forecast to decline over the next 3 years (-1.6% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RUS's Return on Equity is forecast to be low in 3 years time (12.5%).


Next Steps

Past Performance

How has Russel Metals performed over the past 5 years?

26.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RUS has high quality earnings.

Growing Profit Margin: RUS's current net profit margins (3.3%) are lower than last year (5.2%).


Past Earnings Growth Analysis

Earnings Trend: RUS's earnings have grown significantly by 26.3% per year over the past 5 years.

Accelerating Growth: RUS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: RUS had negative earnings growth (-35.6%) over the past year, making it difficult to compare to the Trade Distributors industry average (-5.2%).


Return on Equity

High ROE: RUS's Return on Equity (13.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Russel Metals's financial position?


Financial Position Analysis

Short Term Liabilities: RUS's short term assets (CA$1.6B) exceed its short term liabilities (CA$515.7M).

Long Term Liabilities: RUS's short term assets (CA$1.6B) exceed its long term liabilities (CA$575.7M).


Debt to Equity History and Analysis

Debt Level: RUS's debt to equity ratio (58.9%) is considered high.

Reducing Debt: RUS's debt to equity ratio has increased from 48.8% to 58.9% over the past 5 years.

Debt Coverage: RUS's debt is well covered by operating cash flow (37.9%).

Interest Coverage: RUS's interest payments on its debt are well covered by EBIT (5.5x coverage).


Balance Sheet

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

Debt Coverage by Assets: RUS's debt is covered by short term assets (assets are 2.8x debt).


Next Steps

Dividend

What is Russel Metals's current dividend yield, its reliability and sustainability?

6.75%

Current Dividend Yield


Dividend Yield vs Market

company6.7%marketbottom25%2.0%markettop25%5.6%industryaverage3.1%forecastin3Years6.7%

Current dividend yield vs market & industry

Notable Dividend: RUS's dividend (6.75%) is higher than the bottom 25% of dividend payers in the Canadian market (2.02%).

High Dividend: RUS's dividend (6.75%) is in the top 25% of dividend payers in the Canadian market (5.6%)


Stability and Growth of Payments

Stable Dividend: RUS's dividends per share have been stable in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (73%), RUS's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RUS's dividends in 3 years are forecast to be covered by earnings (70.2% payout ratio).


Next Steps

Management

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

8.9yrs

Average management tenure


CEO

John Reid (50yo)

1.6yrs

Tenure

CA$6,349,494

Compensation

Mr. John Gregory Reid has been the President at Russel Metals Inc. since January 01, 2016 and has been its Chief Executive Officer since May 2, 2018. Mr. Reid served as Chief Operating Officer at Russel  ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD4.80M) is above average for companies of similar size in the Canadian market ($USD1.58M).

Compensation vs Earnings: John's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

8.9yrs

Average Tenure

Experienced Management: RUS's management team is seasoned and experienced (8.9 years average tenure).


Board Age and Tenure

7.1yrs

Average Tenure

65.5yo

Average Age

Experienced Board: RUS's board of directors are considered experienced (7.1 years average tenure).


Insider Trading

Insider Buying: RUS insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$127,98013 Sep 19
John Clark
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares6,000
Max PriceCA$21.33
BuyCA$176,85828 Aug 19
Brian Hedges
EntityIndividual
Role
Member of the Board of Directors
Non-Independent Director
Shares9,000
Max PriceCA$19.84
BuyCA$96,85627 Aug 19
Annie Thabet
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,900
Max PriceCA$20.21
BuyCA$39,00026 Aug 19
William O'Reilly
EntityIndividual
Role
Member of the Board of Directors
Shares2,000
Max PriceCA$19.50
BuyCA$61,61422 Aug 19
John Clark
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,000
Max PriceCA$20.55
BuyCA$100,90021 Aug 19
William O'Reilly
EntityIndividual
Role
Member of the Board of Directors
Shares5,000
Max PriceCA$20.18
BuyCA$50,85121 Aug 19
James Dinning
EntityIndividual
Role
Chairman of the Board
Chair of the Board
Shares2,500
Max PriceCA$20.34
SellCA$243,22527 Feb 19
Alain Benedetti
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceCA$24.32
BuyCA$59,35212 Feb 19
Barbara Jeremiah
EntityIndividual
Role
Member of the Board of Directors
Shares2,585
Max PriceCA$22.96
BuyCA$28,43417 Dec 18
Ryan MacDermid
EntityIndividual
Role
Chief Legal Officer
Vice President of Risk Management & Legal
Shares1,366
Max PriceCA$20.82
BuyCA$48,85117 Dec 18
Annie Thabet
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,340
Max PriceCA$20.92
BuyCA$105,39014 Dec 18
Brian Hedges
EntityIndividual
Role
Member of the Board of Directors
Non-Independent Director
Shares5,000
Max PriceCA$21.19
BuyCA$14,63014 Dec 18
William O'Reilly
EntityIndividual
Role
Member of the Board of Directors
Shares700
Max PriceCA$20.90
BuyCA$21,23013 Dec 18
Alice Laberge
EntityIndividual
Role
Member of the Board of Directors
Shares1,000
Max PriceCA$21.23

Ownership Breakdown

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


Management Team

  • Marion Britton

    Executive VP

    • Tenure: 11.8yrs
    • Compensation: CA$2.53m
  • Lesley M. Coleman

    VP, Controller & Assistant Secretary

    • Tenure: 14.9yrs
    • Compensation: CA$288.79k
  • Sherri McKelvey

    Assistant Secretary

    • Tenure: 0yrs
  • John Reid (50yo)

    CEO, President & Director

    • Tenure: 1.6yrs
    • Compensation: CA$6.35m
  • Dean Rougas

    President of Spartan Steel Products Division

    • Tenure: 8.9yrs
  • Ryan MacDermid

    Vice President of Risk Management & Legal

    • Tenure: 4.8yrs
  • Reynold Wilden

    President of Pioneer Pipe

    • Tenure: 0yrs

Board Members

  • Barbara Jeremiah (67yo)

    • Tenure: 3.6yrs
    • Compensation: CA$148.50k
  • John Tulloch (72yo)

    • Tenure: 6.6yrs
    • Compensation: CA$154.30k
  • Brian Hedges (66yo)

    Non-Independent Director

    • Tenure: 10.6yrs
    • Compensation: CA$2.54m
  • Bill O'Reilly (70yo)

    • Tenure: 10.6yrs
    • Compensation: CA$152.35k
  • Jim Dinning (65yo)

    Chair of the Board

    • Tenure: 5.6yrs
    • Compensation: CA$247.00k
  • John Clark (64yo)

    Independent Director

    • Tenure: 7.6yrs
    • Compensation: CA$157.50k
  • Alice Laberge (62yo)

    • Tenure: 12.4yrs
    • Compensation: CA$152.00k
  • Alain Benedetti (70yo)

    Independent Director

    • Tenure: 13.8yrs
    • Compensation: CA$150.65k
  • John Reid (50yo)

    CEO, President & Director

    • Tenure: 1.6yrs
    • Compensation: CA$6.35m
  • Annie Thabet (58yo)

    Independent Director

    • Tenure: 1.9yrs
    • Compensation: CA$144.00k

Company Information

Russel Metals Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Russel Metals Inc.
  • Ticker: RUS
  • Exchange: TSX
  • Founded: 1929
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Market Cap: CA$1.401b
  • Shares outstanding: 62.17m
  • Website: https://www.russelmetals.com

Number of Employees


Location

  • Russel Metals Inc.
  • 6600 Financial Drive
  • Mississauga
  • Ontario
  • L5N 7J6
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RUSTSX (The Toronto Stock Exchange)YesCommon SharesCACADApr 1973
RUSM.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDApr 1973
RMZDB (Deutsche Boerse AG)YesCommon SharesDEEURApr 1973

Biography

Russel Metals Inc. distributes steel and metal products in North America. The company operates through three segments: Metal Service Centers, Energy Products, and Steel Distributors. The Metal Service Cent ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 23:40
End of Day Share Price2019/12/09 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.