The U.S.-Canada trade spat seemed to conclude in May when the US elected to lift tariffs on Canadian aluminum and steel.
However, the U.S. has maintained pressure on its other North American neighbour. This week, the U.S. announced preliminary duties on imports of fabricated structural steel from Mexico and China.
Russel Metals (TSX:RUS) is a Canadian-based metals distribution company. The stock has been mostly flat in 2019 and has surprisingly dropped 13% over the past three months.
Russel had benefited from steel prices that were raised in the wake of tariffs. The company had embraced the move initially and predicted that higher prices would boost its bottom line.
Steel prices have been routed since late 2018. In the first quarter of 2019, Russel Metals posted strong revenues of $1.03 billion compared to $931 million in the prior year. However, net income dropped from $38 million to $34 million or $0.55 per share.
Revenues in the steel distributors segment increased 30% year-over-year to $122 million.
The company is set to release its second quarter results on August 8. Russel Metals is a suitable target for income and value investors ahead of its next report. The stock boasts a price-to-earnings ratio of 6 and shares had an RSI of 32 as of close on July 10. This puts Russel stock just outside of technically oversold territory.
Russel last paid out a quarterly dividend of $0.38 per share. This represents a tasty 7.3% yield at the time of this writing.
