Richelieu Hardware Ltd's Dividend Analysis
Assessing Dividend Performance, Sustainability, and Growth Prospects
Richelieu Hardware Ltd (RHUHF) recently announced a dividend of $0.15 per share, payable on 2023-11-02, with the ex-dividend date set for 2023-10-18. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into Richelieu Hardware Ltd's dividend performance and assess its sustainability.
What Does Richelieu Hardware Ltd Do?
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Richelieu Hardware Ltd is a Canada-based company that imports, manufactures, and distributes specialty hardware and complementary products. Headquartered in Montreal, the company operates across Canada and the eastern and midwestern regions of the United States. The majority of the company's sales are derived from its operations in Canada. Richelieu's products include furniture, glass, decorative, window, and door hardware, lighting systems, and kitchen and closet storage. The firm primarily serves home furnishing manufacturers, residential and commercial woodworkers, hardware retailers, and renovation superstores.
A Glimpse at Richelieu Hardware Ltd's Dividend History
Richelieu Hardware Ltd has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Richelieu Hardware Ltd's Dividend Yield and Growth
Richelieu Hardware Ltd currently has a 12-month trailing dividend yield of 1.47% and a 12-month forward dividend yield of 1.50%. This suggests an expectation of increased dividend payments over the next 12 months.
Richelieu Hardware Ltd's dividend yield of 1.47% is near a 10-year high and outperforms than 24.9 of global competitors in the Furnishings, Fixtures & Appliances industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Richelieu Hardware Ltd's annual dividend growth rate was 27.10%. Extended to a five-year horizon, this rate decreased to 10.50% per year. Over the past decade, Richelieu Hardware Ltd's annual dividends per share growth rate stands at 7.00%.
Based on Richelieu Hardware Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Richelieu Hardware Ltd stock as of today is approximately 2.42%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-08-31, Richelieu Hardware Ltd's dividend payout ratio is 0.26.
Richelieu Hardware Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Richelieu Hardware Ltd's profitability 9 out of 10 as of 2023-08-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Richelieu Hardware Ltd's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Richelieu Hardware Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Richelieu Hardware Ltd's revenue has increased by approximately 20.70% per year on average, a rate that outperforms than approximately 87.72% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Richelieu Hardware Ltd's earnings increased by approximately 37.10% per year on average, a rate that outperforms than approximately 81.19% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 23.30% outperforms than approximately 79.25% of global competitors.
Next Steps
Based on the analysis of Richelieu Hardware Ltd's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, it's evident that the company has a strong track record and future prospects for dividend sustainability and growth. This makes it a compelling choice for income investors seeking reliable dividend returns. As always, investors are encouraged to conduct their own comprehensive analysis before making investment decisions.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
