Buy Russel, hold on to Stantec

Article Excerpt

RUSSEL METALS $20.76 (Toronto symbol RUS; TSINetwork Rating: Extra Risk) (905-819-7777;; Shares outstanding: 62.1 million; Market cap: $1.3 billion; Dividend yield: 7.3%) is one of North America’s largest metal distributors. It serves over 29,000 clients at 51 locations in Canada and 12 in the U.S. In the three months ended March 31, 2019, revenue rose 11.0%, to $1.03 billion from $931.3 million a year earlier. The increase came from higher selling prices as well as the acquisition of DuBose Steel in 2018. DuBose is a structural steel service operation with processing capabilities. From its facilities in Roseboro and Fayetteville, North Carolina, it serves customers along the U.S. East Coast, including the southeast. Total revenue for DuBose over the last year was roughly $85 million. That’s small in comparison to Russel’s annual sales of over $3.3 billion. But DuBose added immediately to profits and let Russel expand further into the U.S. Earnings in the latest quarter were $34.3 million, or $0.55 a share. That’s a 10.9% decrease…

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