RICHELIEU HARDWARE LTD (RCH.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:RCH - CA76329W1032 - Common Stock
41.85 CAD
+0.08 (+0.19%)
We assign a fundamental rating of 5 out of 10 to RCH. RCH was compared to 12 industry peers in the Trading Companies & Distributors industry. RCH is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. RCH is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year RCH was profitable.
- RCH had a positive operating cash flow in the past year.
- Each year in the past 5 years RCH has been profitable.
- RCH had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 5.94%, RCH is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
- RCH has a Return On Equity of 8.92%. This is comparable to the rest of the industry: RCH outperforms 58.33% of its industry peers.
- RCH has a better Return On Invested Capital (8.51%) than 66.67% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for RCH is in line with the industry average of 8.04%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.94% | ||
| ROE | 8.92% | ||
| ROIC | 8.51% |
ROA(3y)6.86%
ROA(5y)9.68%
ROE(3y)10.17%
ROE(5y)14.48%
ROIC(3y)9.42%
ROIC(5y)12.77%
1.3 Margins
- The Profit Margin of RCH (4.37%) is better than 75.00% of its industry peers.
- RCH's Profit Margin has declined in the last couple of years.
- RCH has a better Operating Margin (7.03%) than 66.67% of its industry peers.
- In the last couple of years the Operating Margin of RCH has declined.
- RCH's Gross Margin of 10.89% is on the low side compared to the rest of the industry. RCH is outperformed by 83.33% of its industry peers.
- In the last couple of years the Gross Margin of RCH has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.03% | ||
| PM (TTM) | 4.37% | ||
| GM | 10.89% |
OM growth 3Y-19.04%
OM growth 5Y-6.95%
PM growth 3Y-22.37%
PM growth 5Y-10.37%
GM growth 3Y-11.93%
GM growth 5Y-3.61%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), RCH is creating some value.
- RCH has less shares outstanding than it did 1 year ago.
- RCH has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for RCH is higher compared to a year ago.
2.2 Solvency
- RCH has an Altman-Z score of 5.86. This indicates that RCH is financially healthy and has little risk of bankruptcy at the moment.
- RCH has a better Altman-Z score (5.86) than 83.33% of its industry peers.
- The Debt to FCF ratio of RCH is 1.48, which is an excellent value as it means it would take RCH, only 1.48 years of fcf income to pay off all of its debts.
- RCH has a better Debt to FCF ratio (1.48) than 100.00% of its industry peers.
- RCH has a Debt/Equity ratio of 0.23. This is a healthy value indicating a solid balance between debt and equity.
- With an excellent Debt to Equity ratio value of 0.23, RCH belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.48 | ||
| Altman-Z | 5.86 |
ROIC/WACC1
WACC8.51%
2.3 Liquidity
- A Current Ratio of 3.29 indicates that RCH has no problem at all paying its short term obligations.
- RCH has a Current ratio of 3.29. This is amongst the best in the industry. RCH outperforms 91.67% of its industry peers.
- RCH has a Quick Ratio of 1.18. This is a normal value and indicates that RCH is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 1.18, RCH is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.29 | ||
| Quick Ratio | 1.18 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 0.65% over the past year.
- RCH shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.66% yearly.
- Looking at the last year, RCH shows a small growth in Revenue. The Revenue has grown by 7.19% in the last year.
- The Revenue has been growing by 11.73% on average over the past years. This is quite good.
EPS 1Y (TTM)0.65%
EPS 3Y-19.58%
EPS 5Y0.66%
EPS Q2Q%4.55%
Revenue 1Y (TTM)7.19%
Revenue growth 3Y2.9%
Revenue growth 5Y11.73%
Sales Q2Q%7.28%
3.2 Future
- RCH is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.89% yearly.
- RCH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.34% yearly.
EPS Next Y17.62%
EPS Next 2Y16.98%
EPS Next 3Y11.89%
EPS Next 5YN/A
Revenue Next Year4.74%
Revenue Next 2Y4.34%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 27.00, RCH can be considered very expensive at the moment.
- The rest of the industry has a similar Price/Earnings ratio as RCH.
- RCH is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.87, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 22.96, RCH is valued on the expensive side.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of RCH is on the same level as its industry peers.
- When comparing the Price/Forward Earnings ratio of RCH to the average of the S&P500 Index (25.96), we can say RCH is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27 | ||
| Fwd PE | 22.96 |
4.2 Price Multiples
- RCH's Enterprise Value to EBITDA ratio is in line with the industry average.
- The rest of the industry has a similar Price/Free Cash Flow ratio as RCH.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.28 | ||
| EV/EBITDA | 11.7 |
4.3 Compensation for Growth
- RCH's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.53
PEG (5Y)41.04
EPS Next 2Y16.98%
EPS Next 3Y11.89%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.48%, RCH has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 5.97, RCH has a dividend in line with its industry peers.
- RCH's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.48% |
5.2 History
- On average, the dividend of RCH grows each year by 25.00%, which is quite nice.
- RCH has paid a dividend for at least 10 years, which is a reliable track record.
- RCH has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)25%
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
- RCH pays out 39.48% of its income as dividend. This is a sustainable payout ratio.
- The dividend of RCH is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP39.48%
EPS Next 2Y16.98%
EPS Next 3Y11.89%
RICHELIEU HARDWARE LTD / RCH.CA FAQ
Can you provide the ChartMill fundamental rating for RICHELIEU HARDWARE LTD?
ChartMill assigns a fundamental rating of 5 / 10 to RCH.CA.
What is the valuation status of RICHELIEU HARDWARE LTD (RCH.CA) stock?
ChartMill assigns a valuation rating of 2 / 10 to RICHELIEU HARDWARE LTD (RCH.CA). This can be considered as Overvalued.
Can you provide the profitability details for RICHELIEU HARDWARE LTD?
RICHELIEU HARDWARE LTD (RCH.CA) has a profitability rating of 4 / 10.
What are the PE and PB ratios of RICHELIEU HARDWARE LTD (RCH.CA) stock?
The Price/Earnings (PE) ratio for RICHELIEU HARDWARE LTD (RCH.CA) is 27 and the Price/Book (PB) ratio is 2.39.
How sustainable is the dividend of RICHELIEU HARDWARE LTD (RCH.CA) stock?
The dividend rating of RICHELIEU HARDWARE LTD (RCH.CA) is 5 / 10 and the dividend payout ratio is 39.48%.