Updating your Cyclical-Growth Payers: Russel Metals Inc.

Article Excerpt

RUSSEL METALS INC. $15 is still a buy for aggressive investors. The company (Toronto symbol RUS; Cyclical-Growth Dividend Payer Portfolio, Manufacturing & Industry sector; Shares outstanding: 62.2 million; Market cap: $933.0 million; Dividend yield: 10.1%; Dividend Sustainability Rating: Above Average; www.russelmetals.com) is one of North America’s largest metal distributors. It serves 33,000 clients at 48 locations in Canada and 16 in the U.S. Since the third quarter of 2014, Russel has paid quarterly dividends of $0.38 a share; the annual rate of $1.52 yields a high 10.1%. Governments have designated most of Russel’s operations as “essential,” so they continue to operate during the COVID-19 pandemic. Even so, due to the slowing economy and lower oil prices (it supplies pipes to oil and gas drillers), the company’s revenue in the three months ended March 31, 2020, fell 21.1%, to $814.7 million from $1.03 billion a year earlier. Overall earnings were $10.5 million, or $0.17 a share. That’s down 69.4% from $34.3 million, or $0.55, a year earlier. In addition…

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