Hardwoods Distribution (TSX:HDI) is a British Columbia-based company that operates a network of distribution centres in Canada and the United States engaged in the wholesale distribution of hardwood lumber and related sheet goods.
The stock has shot up 52% over the past three months as of close on January 3. Shares have achieved average annual returns of 25% over the past 10 years.
The company released its third-quarter 2019 results on November 11. It reported marginal 0.7% growth in sales but a 5% growth in EBITDA.
Hardwoods also posted a 11.2% increase in profit over Q3 2018. The company achieved solid results even in the face of broader headwinds in the sector overall. It owes much of this success to its diversified product mix.
Things are looking positive as the company kicks off the 2020 calendar year. The longer-term view on U.S. construction is strong, according to its outlook, which is supported by levels of housing starts compared to historical levels. The company anticipates that residential construction activity could pick up this year in response to a lower interest rate environment.
Shares of Hardwoods Distribution had a price-to-earnings ratio of 12 as of close on January 5 and a price-to-book value of 1.2.
This is solid territory relative to industry peers. The stock also offers a quarterly dividend of $0.08 per share, representing a 2% yield.
