Stock market trading: Higher costs weigh on Dorel’s earnings

Dorel Industries (Toronto symbol DII.B) makes a wide range of products, including ready-to-assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; home furnishings, including chairs, tables, bunk beds, futons and step stools; and recreational products, including bicycles. It has 4,700 employees, and plants in 19 countries. We analyze Dorel in Stock Pickers Digest, our newsletter for aggressive stock market trading. In the three months ended March 31, 2011, Dorel’s revenue rose 1.9% to $607.8 million from $596.3 million on higher home furnishing and recreation/leisure sales. (All figures except share price and market cap in U.S. dollars.) Earnings fell 18.1%, to $0.95 a share from $1.16 a year earlier. Higher raw-material prices and freight rates, as well as a weaker U.S. dollar, hurt profits. The company holds cash of $24.7 million. Its long-term debt of $354 million is 36.5% of its $970.6-million market cap. Dorel is a dividend paying stock. It pays a quarterly dividend of $0.145 a share. The annual rate of $0.58 yields 2.1%. You can get our clear buy/sell/hold advice on Dorel and dozens of other aggressive stock market trading picks when you subscribe to Stock Pickers Digest. What’s more, you can get the latest issue absolutely free. Click here to learn how.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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