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

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.

22.46%

-0.61

23.32%

S&P/TSX 60

23.72%

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)

11.73%

EBIT Growth (5y)

3.26%

EBIT to Interest (avg)

32.88

Debt to EBITDA (avg)

0.33

Net Debt to Equity (avg)

0.11

Sales to Capital Employed (avg)

1.80

Tax Ratio

26.07%

Dividend Payout Ratio

39.46%

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

2.41

EV to EBIT

17.06

EV to EBITDA

11.01

EV to Capital Employed

2.36

EV to Sales

1.20

PEG Ratio

11.96

Dividend Yield

ROCE (Latest)

13.82%

ROE (Latest)

9.42%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

Bullish

RSI

No Signal

Bollinger Bands

Mildly Bullish

Moving Averages

Mildly Bullish (Daily)

KST

Mildly Bearish

Mildly Bullish

Dow Theory

Mildly Bearish

No Trend

OBV

Mildly Bearish

Mildly Bullish

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

10What is working for the Company

INVENTORY TURNOVER RATIO(HY)

Highest at 3.1 times

INTEREST COVERAGE RATIO(Q)

Highest at 1,827.46

RAW MATERIAL COST(Y)

Fallen by -0.44% (YoY

OPERATING PROFIT(Q)

Highest at CAD 59.23 MM

OPERATING PROFIT MARGIN(Q)

Highest at 11.59 %

PRE-TAX PROFIT(Q)

Highest at CAD 36.52 MM

NET PROFIT(Q)

Highest at CAD 25.56 MM

EPS(Q)

Highest at CAD 0.47

-2What is not working for the Company

INTEREST(9M)

At CAD 10.63 MM has Grown at 16.36%

Here's what is working for Richelieu Hardware Ltd.

Interest Coverage Ratio

Highest at 1,827.46

in the last five periods

MOJO Watch

The company's ability to manage interest payments is improving

Operating Profit to Interest

Inventory Turnover Ratio

Highest at 3.1 times and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Operating Profit

Highest at CAD 59.23 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (CAD MM)

Operating Profit Margin

Highest at 11.59 %

in the last five periods

MOJO Watch

Company's profit margin has improved

Operating Profit to Sales

Pre-Tax Profit

Highest at CAD 36.52 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (CAD MM)

Net Profit

Highest at CAD 25.56 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is positive

Net Profit (CAD MM)

EPS

Highest at CAD 0.47

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (CAD)

Raw Material Cost

Fallen by -0.44% (YoY)

MOJO Watch

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

Raw Material Cost as a percentage of Sales

Depreciation

Highest at CAD 19.46 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

At CAD 10.63 MM has Grown at 16.36%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CAD MM)