Russel Metals (TSX:RUS) is a Toronto-based metals distribution company that distributes steel and other metal products in North America. Shares of this dividend stock have dropped 4.3% in 2022 as of mid-afternoon trading on January 31. The stock is still up 35% in the year-over-year period.
Commodities gained significant momentum through 2021 on the back of resurgent economic growth and rising inflation. There is considerable uncertainty to kick off 2022, though GDP growth has remained undimmed. Moreover, central banks have not yet raised interest rates in the face of inflation that has soared to multi-decade highs.
Investors can expect the company to unveil its fourth quarter and full year 2021 earnings on February 10. It reported revenues of $1.10 billion in Q3 2021 – up from $615 million in the previous year. Meanwhile, net income rose to $132 million or $2.10 per share compared to $18 million or $0.29 per share in Q3 2020. Moreover, adjusted EBITDA increased to $192 million over $47 million.
Russel Metals benefited from strong market conditions. Steel prices surged in 2021, bolstering Russel’s operating profit in Q3 2021 and for the first nine months of the fiscal year. Its metal service centres posted selling price per ton growth of 87% year-over-year and 19% from the pervious quarter.
Shares of this dividend stock last had a price-to-earnings ratio of 6.2. That puts Russel Metals in very favourable value territory. Better yet, it offers a quarterly dividend of $0.38 per share. This represents a very solid 4.7% yield.