Russel Metals has executed a disciplined acquisition and integration strategy that has fundamentally transformed the company from a primarily Canadian metals distributor into a substantial North American platform with meaningful scale in high-growth U.S. markets.
This geographic diversification matters structurally because the U.S. industrial base is benefiting from secular reshoring trends and infrastructure spending initiatives that are expected to persist for some time. This firm is positioned to capture a big share of this growth given its expanding footprint in key manufacturing regions such as the Carolina Triangle, Houston, and Florida.
Meanwhile the shares trade at a low 13.3 times forecast forward earnings despite improving fundamentals driven by the company’s scale gains and value-added processing investments. The dividend yield is also attractive.
RUSSEL METALS (Toronto symbol RUS; russelmetals.com) is one of North America’s largest metal distribution companies, with a growing focus on value-added processing.
The company carries out business through three segments: metals service centres, energy field stores, and steel distributors. Its network of service centres offers 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 providers of large volumes to other steel service centres and equipment manufacturers on an “as is” basis.
In December 2024, Russel completed the acquisition of Tampa Bay Steel Corporation for $79.5 million U.S. That firm operates in the central Florida region, and its business includes significant value-added processing and non-ferrous products. Tampa Bay Steel has annual revenue of about $115 million U.S.
In January 2026, Russel completed the acquisition of seven service centre locations from Kloeckner Metals 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).
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The acquisition of these seven locations should be a good fit for Russel. They complement its U.S. locations and deepen their 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 deal, its revenue base will be more than 50% in the U.S., as compared to 30% in 2019 and 39% in 2024.
Russel Metals’ prospects are strong, but the valuation remains cheap
In late 2025, Russel announced a series of initiatives related to its Western Canadian operations that are aimed at cutting excess capacity/redundant locations and gaining operational efficiencies.
The company has agreements in place to sell the real estate associated with its branches in Delta, B.C., and Saskatoon, Saskatchewan. Total cash proceeds will be greater than $40 million.
As well, certain processing equipment, racking and cranes at three of its Western Canadian locations (including the Delta location) will be removed, refurbished and relocated to its other operations in North America or sold.
Meanwhile, the long-term outlook for Russel is positive, and the stock trades at just 13.3 times the 2026 forecast earnings of $3.63 a share.
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.
With the June 2025 payment, Russel raised your quarterly dividend by 2.4%, to $0.43 a share from $0.42. The new annual rate of $1.72 yields an attractive 3.6%.
Recommendation in Power Growth Investor: Russel Metals Inc. is a buy.
