RECTICEL (RECT.BR) Stock Fundamental Analysis
Europe - Euronext Brussels - EBR:RECT - BE0003656676 - Common Stock
10.2 EUR
-0.06 (-0.58%)
We assign a fundamental rating of 5 out of 10 to RECT. RECT was compared to 22 industry peers in the Building Products industry. While RECT seems to be doing ok healthwise, there are quite some concerns on its profitability. RECT is valued quite expensive, but it does show an excellent growth.
1. Profitability
1.1 Basic Checks
- In the past year RECT was profitable.
- RECT had a positive operating cash flow in the past year.
- RECT had positive earnings in each of the past 5 years.
- Each year in the past 5 years RECT had a positive operating cash flow.
1.2 Ratios
- RECT has a Return On Assets of 1.62%. This is in the lower half of the industry: RECT underperforms 77.27% of its industry peers.
- With a Return On Equity value of 2.64%, RECT is not doing good in the industry: 77.27% of the companies in the same industry are doing better.
- RECT has a Return On Invested Capital of 3.12%. This is in the lower half of the industry: RECT underperforms 77.27% of its industry peers.
- RECT had an Average Return On Invested Capital over the past 3 years of 2.83%. This is significantly below the industry average of 10.48%.
- The 3 year average ROIC (2.83%) for RECT is below the current ROIC(3.12%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.62% | ||
| ROE | 2.64% | ||
| ROIC | 3.12% |
ROA(3y)2.99%
ROA(5y)4.61%
ROE(3y)6.36%
ROE(5y)10.34%
ROIC(3y)2.83%
ROIC(5y)2.72%
1.3 Margins
- RECT has a worse Profit Margin (1.74%) than 77.27% of its industry peers.
- RECT's Profit Margin has declined in the last couple of years.
- The Operating Margin of RECT (3.39%) is worse than 77.27% of its industry peers.
- In the last couple of years the Operating Margin of RECT has declined.
- With a Gross Margin value of 16.66%, RECT is not doing good in the industry: 95.45% of the companies in the same industry are doing better.
- RECT's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.39% | ||
| PM (TTM) | 1.74% | ||
| GM | 16.66% |
OM growth 3Y-24.16%
OM growth 5YN/A
PM growth 3Y-37.05%
PM growth 5YN/A
GM growth 3Y-3.23%
GM growth 5YN/A
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), RECT is destroying value.
- The number of shares outstanding for RECT has been increased compared to 1 year ago.
- The debt/assets ratio for RECT is higher compared to a year ago.
2.2 Solvency
- RECT has an Altman-Z score of 2.89. This is not the best score and indicates that RECT is in the grey zone with still only limited risk for bankruptcy at the moment.
- RECT has a Altman-Z score of 2.89. This is in the better half of the industry: RECT outperforms 63.64% of its industry peers.
- RECT has a debt to FCF ratio of 3.17. This is a good value and a sign of high solvency as RECT would need 3.17 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 3.17, RECT is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
- A Debt/Equity ratio of 0.10 indicates that RECT is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.10, RECT belongs to the top of the industry, outperforming 86.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.1 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 2.89 |
ROIC/WACC0.41
WACC7.6%
2.3 Liquidity
- RECT has a Current Ratio of 1.91. This is a normal value and indicates that RECT is financially healthy and should not expect problems in meeting its short term obligations.
- RECT's Current ratio of 1.91 is amongst the best of the industry. RECT outperforms 81.82% of its industry peers.
- RECT has a Quick Ratio of 1.52. This is a normal value and indicates that RECT is financially healthy and should not expect problems in meeting its short term obligations.
- RECT has a Quick ratio of 1.52. This is amongst the best in the industry. RECT outperforms 86.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.91 | ||
| Quick Ratio | 1.52 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 44.77% over the past year.
- RECT shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -30.42% yearly.
- RECT shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.10%.
- The Revenue has been growing by 10.75% on average over the past years. This is quite good.
EPS 1Y (TTM)44.77%
EPS 3Y-30.42%
EPS 5YN/A
EPS Q2Q%-100%
Revenue 1Y (TTM)15.1%
Revenue growth 3Y10.75%
Revenue growth 5YN/A
Sales Q2Q%12.25%
3.2 Future
- RECT is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 23.80% yearly.
- Based on estimates for the next years, RECT will show a quite strong growth in Revenue. The Revenue will grow by 8.98% on average per year.
EPS Next Y-10.64%
EPS Next 2Y21.98%
EPS Next 3Y23.8%
EPS Next 5YN/A
Revenue Next Year8%
Revenue Next 2Y8.14%
Revenue Next 3Y8.98%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 48.57, the valuation of RECT can be described as expensive.
- Based on the Price/Earnings ratio, RECT is valued a bit more expensive than 72.73% of the companies in the same industry.
- RECT is valuated expensively when we compare the Price/Earnings ratio to 28.87, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 20.24, RECT is valued on the expensive side.
- The rest of the industry has a similar Price/Forward Earnings ratio as RECT.
- The average S&P500 Price/Forward Earnings ratio is at 25.96. RECT is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.57 | ||
| Fwd PE | 20.24 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as RECT.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of RECT indicates a slightly more expensive valuation: RECT is more expensive than 68.18% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.47 | ||
| EV/EBITDA | 10.02 |
4.3 Compensation for Growth
- A more expensive valuation may be justified as RECT's earnings are expected to grow with 23.80% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y21.98%
EPS Next 3Y23.8%
5. Dividend
5.1 Amount
- RECT has a Yearly Dividend Yield of 2.14%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 3.43, RECT pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, RECT has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.14% |
5.2 History
- The dividend of RECT is nicely growing with an annual growth rate of 8.91%!
Dividend Growth(5Y)8.91%
Div Incr Years0
Div Non Decr Years2
5.3 Sustainability
- RECT pays out 155.43% of its income as dividend. This is not a sustainable payout ratio.
- RECT's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP155.43%
EPS Next 2Y21.98%
EPS Next 3Y23.8%
RECTICEL / RECT.BR FAQ
Can you provide the ChartMill fundamental rating for RECTICEL?
ChartMill assigns a fundamental rating of 5 / 10 to RECT.BR.
Can you provide the valuation status for RECTICEL?
ChartMill assigns a valuation rating of 2 / 10 to RECTICEL (RECT.BR). This can be considered as Overvalued.
What is the profitability of RECT stock?
RECTICEL (RECT.BR) has a profitability rating of 3 / 10.
What is the earnings growth outlook for RECTICEL?
The Earnings per Share (EPS) of RECTICEL (RECT.BR) is expected to decline by -10.64% in the next year.
Is the dividend of RECTICEL sustainable?
The dividend rating of RECTICEL (RECT.BR) is 4 / 10 and the dividend payout ratio is 155.43%.