Russel Metals’ robust growth momentum, fueled by strategic U.S. expansion and shipment gains amid favourable steel pricing and demand from infrastructure, manufacturing, and energy sectors is the main reason to buy.
Strong profit generation, liquidity, and shareholder returns position the stock well for cycles, with a capex pipeline for value-added processing to boost margins long-term.
The stock trades at a moderate 16.5 times the company’s forward earnings forecast. That’s below historical averages for metals distributors despite the firm’s record results while infrastructure tailwinds offer plenty of upside for the foreseeable future.
RUSSEL METALS INC. (Toronto symbol RUS; www.russelmetals.com) is a leading metals distributor for North America, with a growing focus on value-added processing. The company carries on business in three segments: metals service centres, energy field stores and steel distributors. Its network of metals service centres carries an extensive line of metal products in a wide range of sizes, shapes and specifications, including carbon hot rolled and cold finished steel, pipe and tubular products, stainless steel, aluminum and other non-ferrous specialty metals. Its energy field stores carry a specialized product line focused on the needs of energy industry customers. Its steel distributors act as master distributors selling steel in large volumes to other steel service centres and large equipment manufacturers mainly on an “as is” basis.
In January 2026, Russel completed the acquisition of seven service centre locations from Kloeckner Metals Corporation for $118.6 million U.S. Russel acquired Kloeckner’s metals service centres in Dubuque (Iowa), Charlotte (North Carolina), Suwanee (Georgia), Houston (Texas), Austin (Texas), Jacksonville (Florida) and Pompano Beach (Florida).
For the period between January 1, 2023, and June 30, 2025, the seven service centres generated average annual revenues of approximately $500 million U.S. ($703 million Canadian). To put that into context, Russel has annual revenue of about $4.8 billion, The acquisition of these seven locations should be a good fit for Russel. They complement its U.S. locations by tying into its existing footprint in key regions of Florida/Georgia, Texas, the Carolinas and Iowa/Wisconsin. In addition, this transaction is a continuation of Russel’s long-term growth strategy in the U.S. Upon completion of this transaction, its revenue base will be more than 50% in the U.S., as compared to 30% in 2019 and 39% in 2024.
Having more outlets in the U.S. helps lower Russel’s exposure to U.S. tariffs. Moreover, Russel distributes steel—rather than making it or using it as a raw material. That means the company actually profits from tariffs pushing up steel prices, which boosts the company’s revenue and the value of its vast inventory. Demand for steel also remains strong thanks to the buildout of new AI datacentres.
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Russel Metals’ moderate P/E and solid yield add appeal
In the three months ended December 31, 2025, Russel’s revenue rose 5.2%, to $1.09 billion from $1.04 billion a year earlier. Overall earnings in the latest quarter were $30.4 million, or $0.55 a share. That’s a 13.0% increase from $26.9 million, or $0.47.
Notably, Russel distributes steel—rather than making it or using it as a raw material. That means Russel actually profits from tariffs pushing up steel prices, which boosts the company’s revenue and the value of its vast inventory.
Still, tariffs and any reduced cross-border activity can hurt the overall economy and therefore slow demand from Russel’s customers. Currently, however, the company reports that demand is stable.
All that bodes well for Russel’s sales, profits and stock price.
Meanwhile, the long-term outlook for Russel is positive, and the stock trades at a moderate 16.5 times the 2026 forecast earnings of $3.73 a share. The shares yield 2.8%.
Recommendation in Power Growth Investor: Russel Metals Inc. is a buy.
