Richelieu Hardware Ltd. (RCH) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Richelieu Hardware Ltd.

Neo Performance Materials, Inc.

Omni-Lite Industries Canada, Inc.

Algoma Steel Group, Inc.

Tree Island Steel Ltd.

South Star Battery Metals Corp.

Why is Richelieu Hardware Ltd. ?

High Management Efficiency with a high ROCE of 21.36%

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 32.88

Healthy long term growth as Net Sales has grown by an annual rate of 12.96% and Operating profit at 7.33%

Flat results in May 25

ROCE(HY) Lowest at 9%
RAW MATERIAL COST(Y) Grown by 9.96% (YoY)
DEBT-EQUITY RATIO (HY) Highest at 30.65 %

With ROE of 9.28%, it has a fair valuation with a 2.06 Price to Book Value

The stock is trading at a fair value compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -12.88%, its profits have fallen by -12.7%

Majority shareholders : Mutual Funds

Below par performance in long term as well as near term

Along with generating -12.88% returns in the last 1 year, the stock has also underperformed S&P/TSX 60 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Richelieu Hardware Ltd. should be less than 10%
Overall Portfolio exposure to Industrial Manufacturing should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Industrial Manufacturing)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Richelieu Hardware Ltd. for you?

Low Risk, Low Return

Absolute

Risk Adjusted

Volatility

Richelieu Hardware Ltd.

-4.16%

-0.61

23.32%

S&P/TSX 60

19.1%

1.54

14.62%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

12.43%

EBIT Growth (5y)

4.77%

EBIT to Interest (avg)

32.88

Debt to EBITDA (avg)

0.33

Net Debt to Equity (avg)

0.11

Sales to Capital Employed (avg)

1.79

Tax Ratio

26.07%

Dividend Payout Ratio

39.07%

Pledged Shares

Institutional Holding

0.26%

ROCE (avg)

21.36%

ROE (avg)

15.79%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

2.13

EV to EBIT

15.46

EV to EBITDA

9.98

EV to Capital Employed

2.08

EV to Sales

1.08

PEG Ratio

Dividend Yield

ROCE (Latest)

13.47%

ROE (Latest)

9.33%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

Mildly Bullish

RSI

No Signal

Bollinger Bands

Mildly Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Mildly Bullish

Dow Theory

No Trend

OBV

No Trend

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

5What is working for the Company

DIVIDEND PAYOUT RATIO(Y)

Highest at 37.66%

INVENTORY TURNOVER RATIO(HY)

Highest at 2.98%

NET SALES(Q)

Highest at CAD 512.2 MM

OPERATING PROFIT(Q)

Highest at CAD 55.22 MM

-11What is not working for the Company

ROCE(HY)

Lowest at 9%

RAW MATERIAL COST(Y)

Grown by 9.96% (YoY

DEBT-EQUITY RATIO (HY)

Highest at 30.65 %

INTEREST(Q)

Highest at CAD 3.97 MM

Here's what is working for Richelieu Hardware Ltd.

Dividend Payout Ratio

Highest at 37.66% and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher proportion of profits generated as dividend

DPR (%)

Net Sales

Highest at CAD 512.2 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (CAD MM)

Operating Profit

Highest at CAD 55.22 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (CAD MM)

Inventory Turnover Ratio

Highest at 2.98%

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Depreciation

Highest at CAD 18.97 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (CAD MM)

Here's what is not working for Richelieu Hardware Ltd.

Interest

Highest at CAD 3.97 MM

in the last five periods and Increased by 6.9% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CAD MM)

Debt-Equity Ratio

Highest at 30.65 %

in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio

Raw Material Cost

Grown by 9.96% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales