Wondering what your thoughts were on Russel Metals recent earning report. Also for a long term hold would you prefer Richelieu Hardware or Russel Metals?
Much thanks
Stuart
EPS of $0.47 missed estimates of $0.628 and revenues of $1.04B missed estimates of $1.08B. Sales were roughly flat year-over-year, and most profit metrics declined in the quarter. It completed two acquisitions (Samuel Service Centers and Tampa Bay Steel) and it repurchased around 6% of outstanding shares in the past year. RUS estimates that 39% of its revenue is now from US operations. The market reaction was mostly muted.
RCH and RUS are both around $1.5B to $1.6B in market cap, although they operate in different industries (RCH is a distributor of cabinetry and other products while RUS is a large metal distribution name). RUS has demonstrated better returns over the long-term, and it currently has a stronger free cash flow yield. RUS trades at a cheaper valuation and forward returns are expected to be stronger than RCH. Overall, we would give RUS the edge here.