Is it a good company at a reasonable price? It may have a low dividend yield, but the dividend increases have been good, so if you look at the current dividend and my original purchase in 2009, I am earning 10.87% yield. This is why I go for lower dividend yield but with good increases. The main worry of the analysts seems to be that they company overstocked after Covid. Some think that this will be solved soon. Operating Costs were higher in 2024 than in 2023. However, if you like this company for a long term investment, the time to buy is when it is relatively cheap or reasonable.
I own this stock of Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF). I initially bought this stock in 2009 because it was recommended by the Investment Reporter. It is not on any of the dividend lists, probably because they only started to pay dividends in 2000, they are a rather small company and they did not increase dividends in 2009. This stock would be considered to be a dividend paying growth stock. In 2009, I thought I would add to what I had in this stock. This stock has been much recommended by MPL Communications.
When I was updating my spreadsheet, I noticed I have done well on this stock, although stock price is down this year from last year. My total return if 14.15% with 12.35% from capital gains and 1.80% from dividends.
If you had invested in this company in December 2014, for $1,007.00 you would have bought 53 shares at $19.00 per share. In December 2024, after 10 years you would have received $180.20 in dividends. The stock would be worth $2,069.12. Your total return would have been $2,249.32. This would be a total return of 8.67% per year with 7.47% from capital gain and 1.21% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $19.00 | $1,007.00 | 53 | 10 | $180.20 | $2,069.12 | $2,249.32 |
The current dividend yield is low with dividend growth good. The current dividend yield is low (below 2%) at 1.47%. The 5, 10 and historical median dividend yields are also low at 1.23%, 0.91% and 1.13%. The dividend growth is good (15% and above) at 18.8% per year over the past 5 years. The last dividend increase was in 2025 and it was for 2.2%. The was no increase last year. Increases can vary a lot.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is good at 39% with 5 year coverage at 22%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 20% with 5 year coverage at 14%. The DPR for 2024 for Free Cash Flow (FCF) is good at 18% with 5 year coverage at 22%. (MS and Market Screener used to agree on FCF, but no longer, but they are not far off.)
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 39.22% | 21.57% |
| CFPS | 20.00% | 14.29% |
| FCF | 17.85% | 21.86% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.00 and currently at 0.00. They have no long term debt. The Liquidity Ratio for 2024 is good at 3.12 and 3.12 currently. The Debt Ratio for 2024 is good at 3.00 and 3.00 currently. The Leverage and Debt/Equity Ratios for 2024 are good at 1.50 and 0.50 and currently at 1.50 and 0.50.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.00 | 0.00 |
| Intang/GW | 0.09 | 0.09 |
| Liquidity | 3.12 | 3.12 |
| Liq. + CF | 3.47 | 3.47 |
| Debt Ratio | 3.00 | 3.00 |
| Leverage | 1.50 | 1.50 |
| D/E Ratio | 0.50 | 0.50 |
The Total Return per year is shown below for years of 5 to 31 to the end of 2024. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 18.83% | 8.95% | 7.55% | 1.40% |
| 2014 | 10 | 12.39% | 8.67% | 7.47% | 1.21% |
| 2009 | 15 | 12.20% | 13.17% | 11.63% | 1.54% |
| 2004 | 20 | 12.86% | 9.92% | 8.73% | 1.19% |
| 1999 | 25 | 13.55% | 14.66% | 13.01% | 1.65% |
| 1994 | 30 | 15.83% | 14.29% | 1.54% | |
| 1993 | 31 | 15.14% | 13.75% | 1.39% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 13.99, 20.19 and 23.08. The corresponding 10 year ratios are 18.37, 21.06 and 25.20. The corresponding historical ratios are 13.06, 15.80 and 18.32. The current P/E Ratio is 21.40 based on a stock price of $39.59 and EPS estimate for 2025 of $1.85. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $26.12. The 10-year low, median, and high median Price/Graham Price Ratios are 1.43, 1.72 and 2.04. The current P/GP Ratio is 1.52 based on a stock price of $39.59. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Book Value per Share Ratio of 3.19. The current P/B Ratio is 2.42 based on a stock price of $39.59, Book Value of $905M and Book Value per Share of $16.39. The current ratio is 24% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I also have a Book Value per Share estimate for 2025 of $17.67. This implies a ratio of 2.24 based on a stock price of $39.59 and Book Value of $976M. This ratio is 30% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 19.27. The current P/CF Ratio is 16.37 based on Cash Flow for the last 12 months of $133.6M, Cash Flow per Share of $2.42 and a stock price of $39.59. The current ratio is 15% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 1.13%. The current dividend yield is 1.55% based on dividends of $0.613 and a stock price of $39.59. The current dividend yield is 37% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 0.91%. The current dividend yield is 1.55% based on dividends of $0.613 and a stock price of $39.59. The current dividend yield is 71% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 1.51. The current ratio is 1.11 based on Revenue estimate for 2025 of $1,966M, Revenue per Share of $35.60 and a stock price of $39.59. The current ratio is 27% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is testing as relatively cheap. The dividend yield tests show that the stock price is relatively cheap. This is confirmed by the P/S Ratio test. Other testing is showing the stock price from relatively cheap to relatively reasonable.
When I look at analysts’ recommendations, I find Hold (2). The consensus would be a Hold. The 12 month stock price consensus is $43.25 with a high of $44.50 and low of $42.00. The price consensus of $43.25 implies a total return of 10.79% with 9.24% from capital gains and 1.55% from dividends.
Analysts on Stock Chase have different views on this stock. However, all mention that they have excess stocks which they must deal with. Stock Chase gives this stock 3 stars out of 5. Jitendra Parashar on Motley Fool says that they the stock price recently jumped. Amy Legate-Wolfe on Motley Fool said in 2023 that this stock was a hidden gem. The company put out a press release via Newswire about the company’s fourth quarter of 2024.
Simply Wall Street via Yahoo Finance reviews this stock’s dividends and its payment. Simply Wall Street gives this stock 2 and one half stars out of 5. They list no risks.
Richelieu Hardware Ltd is a Canada-based company that imports, manufactures, and distributes specialty hardware and complementary products. Headquartered in Montreal, the company operates across Canada and the eastern and midwestern regions of the United States. The majority of the company’s sales are derived from its operations in Canada. Its web site is here Richelieu Hardware Ltd.
The last stock I wrote about was about was EQB Inc (TSX-EQB, OTC-EQGPF) … learn more. The next stock I will write about will be Canadian National Railway (TSX-CNR, NYSE-CNI) … learn more on Friday, February7, 2025 around 5 pm. Tomorrow on my other blog I will write about Something to Buy February 2025…. learn more on Thursday, February 6, 2025 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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