Opinions on RPM?

[fenders53]

This one has been on my watch list for a long time.  Does anyone currently own it?  I owned it in an investment club 20+ years ago and it was a solid dividend payer, but not too inspiring exciting to follow.  It seems it is still a niche player, with considerable exposure to retail chemical products such as Rustoleum paint and some quality wood finishings I actually use.  

Share price has come down, but it presently still looks considerably overvalued.  It would look better to me with a 3% Div yield.  Does anyone have a dissenting opinion?  If not it's gong to spend some more time on my watch list.

[EricL]

Looks like an interesting company, but I agree that its a bit expensive right now. Dividend growth rate isn't all that impressive either at just 5.3% annualized over the last two decades.

Any idea why analysts are showing such big EPS growth in 2020 and 2021? FAST Graph is showing 33% and 30% growth the next two years.

[fenders53]

(02-17-2019, 12:19 AM)EricL Wrote: Looks like an interesting company, but I agree that its a bit expensive right now. Dividend growth rate isn't all that impressive either at just 5.3% annualized over the last two decades.

Any idea why analysts are showing such big EPS growth in 2020 and 2021? FAST Graph is showing 33% and 30% growth the next two years.

 No I really don't other than 2019 is predicted to be down from 2018.  That doesn't explain 2021 growth projections that high.  I'll do some more research.  I;ve read they are expecting reduced raw materials prices but their core business does not grow like that to my knowledge.  CFRA analyst report predicts 14% next three years.  If true it would still take a year of two to grow into their PE for a fair valuation.  They seem to command a premium valuation.  They compete in the chemicals and coatings sector with the big boys, Dow and PPG, but they don't.  They have a bit of a moat in their niche brands that are present in about every big box retailer I am aware of.  And the local hardware stores as well.  I think they are attractive at some point, but a minimum of $5 more needs to come off that share price.  On a side note I'm surprised nobody acquired them though the years when their market cap was occasionally low.

[rayray]

I never looked at RPM....but I've been looking at PPG off and on for a few years, another that seems to be a little overvalued too.

[fenders53]

(02-18-2019, 11:05 AM)rayray Wrote: I never looked at RPM....but I've been looking at PPG off and on for a few years, another that seems to be a little overvalued too.

All the CHEM and coatings companies are a little risky right here.  They were showing some signs of distress before the tariffs kicked in and they will pull back hard when the recession finally comes.  Some great companies though. 

PPG, Sherwin-Williams and Dow are among the companies I thought might have acquired RPM decades ago.  The Rustoleum brand is powerful and RPM is not a huge cap company.  I gave it some more thought and I can't think of a retailer that sells paint, that doesn't sell Rustoleum.  Any guy that hasn't heard of Rustoleum should turn in his man card immediately. 

[Roadmap2Retire]

(02-18-2019, 07:30 PM)fenders53 Wrote:  Any guy that hasn't heard of Rustoleum should turn in his man card immediately. 

lol Ive never heard of Rustoleum and I refuse to hand in my man card 

Ive been reading a lot about SHW lately and RPM keeps popping on the screens in the related space. Dont know much about RPM, but it does seem like an interesting play in the building/construction space.

Looks like a jump in earnings expected in 2021 without too much change in revenue...

RPM EPS estimates

[fenders53]

(02-28-2019, 02:15 PM)Roadmap2Retire Wrote:

(02-18-2019, 07:30 PM)fenders53 Wrote:  Any guy that hasn't heard of Rustoleum should turn in his man card immediately. 

lol Ive never heard of Rustoleum and I refuse to hand in my man card 

Ive been reading a lot about SHW lately and RPM keeps popping on the screens in the related space. Dont know much about RPM, but it does seem like an interesting play in the building/construction space.

Looks like a jump in earnings expected in 2021 without too much change in revenue...

RPM EPS estimates

[fenders53]

LOL, it's hard to find a major US retailer that doesn't sell Rustoleum aerosol paint. I've looked further and RPM stock will have to pull way back before it gets further interest from me. Valuation just makes the risk/reward look well below average.