Richelieu Hardware Ltd. Fundamental Analysis (TSX: RCH.TO)
Richelieu Hardware Ltd. Fundamental Analysis (TSX: RCH.TO)
Richelieu Hardware Ltd. (TSX: RCH.TO) shows weak financial fundamentals with a PE ratio of 22.62, profit margin of 4.34%, and ROE of 9.04%. The company generates $2.0B in annual revenue with moderate year-over-year growth of 7.19%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 51.0/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze RCH.TO's fundamental strength across five key dimensions:
Efficiency Score
WeakRCH.TO struggles to generate sufficient returns from assets.
Valuation Score
ModerateRCH.TO shows balanced valuation metrics.
Growth Score
ModerateRCH.TO shows steady but slowing expansion.
Financial Health Score
ExcellentRCH.TO maintains a strong and stable balance sheet.
Profitability Score
WeakRCH.TO struggles to sustain strong margins.
Key Financial Metrics
Is RCH.TO Expensive or Cheap?
P/E Ratio
RCH.TO trades at 22.62 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, RCH.TO's PEG of 5.69 indicates potential overvaluation.
Price to Book
The market values Richelieu Hardware Ltd. at 2.00 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 7.79 times EBITDA. This is generally considered low.
How Well Does RCH.TO Make Money?
Net Profit Margin
For every $100 in sales, Richelieu Hardware Ltd. keeps $4.34 as profit after all expenses.
Operating Margin
Core operations generate 6.90 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.04 in profit for every $100 of shareholder equity.
ROA
Richelieu Hardware Ltd. generates $5.86 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Richelieu Hardware Ltd. generates limited operating cash flow of $187.87M, signaling weaker underlying cash strength.
Free Cash Flow
Richelieu Hardware Ltd. produces free cash flow of $170.51M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $3.10 in free cash annually.
FCF Yield
RCH.TO converts 8.71% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
22.62
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
5.69
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.002
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.98
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.31
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.04
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How RCH.TO Stacks Against Its Sector Peers
| Metric | RCH.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 22.62 | 29.34 | Better (Cheaper) |
| ROE | 9.04% | 1104.00% | Weak |
| Net Margin | 4.34% | -25199.00% (disorted) | Weak |
| Debt/Equity | 0.31 | 0.95 | Strong (Low Leverage) |
| Current Ratio | 3.04 | 21.76 | Strong Liquidity |
| ROA | 5.86% | -1328232.00% (disorted) | Weak |
RCH.TO outperforms its industry in 3 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Richelieu Hardware Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
77.07%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
2.40%
Industry Style: Cyclical, Value, Infrastructure
GrowingFCF CAGR
38.97%
Industry Style: Cyclical, Value, Infrastructure
High Growth