Generally, a higher-than-usual dividend yield is a sign that the payout may exceed the company’s earning capacity. However, this company has held its dividends steady for several years, and we feel its current payouts continue to be safe. It’s also a leader in a niche industry, which cuts your risk.
The stock trades at just 5.7 times the company’s 2022 earnings forecast.
RUSSEL METALS INC. (Toronto symbol RUS; www.russelmetals.com) is one of the largest metals distributors in North America with more than 30,000 end customers across many different industries.
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On December 1, 2021, Russel closed its acquisition of Arkansas-based Boyd Metals for $110 million U.S. Boyd specializes in providing carbon steel, stainless steel, and aluminum products. The purchase will add about $244 million U.S. to Russel’s annual revenue.
Russel has paid regular quarterly dividends of $0.38 a share since the third quarter of 2014; the annual rate of $1.52 yields a high 5.3%. The company has made 82 consecutive quarterly dividend payments.
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The company’s revenue in the three months ended June 30, 2022, jumped 27.5%, to $1.36 billion from $1.07 billion a year earlier. That reflects the improving economy and higher oil prices. (Russel supplies pipes to oil and gas drillers.)
Russel earned $124.0 million, or $1.96 a share. That was up 5.3% from $117.8 million, or $1.88.
The balance sheet is also sound. As of June 30, 2022, Russel held cash of $186.9 million, and its long-term debt of $295.4 million is a low 16% of its market cap.
The shares trade at a low 5.7 times the $5.06 a share that the company will probably earn in 2022.
This is a good stock which I have held since it was in the mid teens ( $ ) It went up to nearly $ 40 when I should have sold a portion at least but the dividend has remained the same so I feel it will return to that high and may even surpass $ 40 a share.
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X No, I don’t want to make steady income from dividends.
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This is a good stock which I have held since it was in the mid teens ( $ ) It went up to nearly $ 40 when I should have sold a portion at least but the dividend has remained the same so I feel it will return to that high and may even surpass $ 40 a share.