Three Industrial Stocks amid Pandemic Fear – ALX, RWC, SGF

  • Mar 26, 2020 AEDT
  • Team Kalkine
Three Industrial Stocks amid Pandemic Fear – ALX, RWC, SGF

The global building materials market comprises of industries that deal with concrete, sand, cement, brick and other related manufacturing. The industry is also a supplier to other related industries- the ones dealing with furniture, wiring, and so forth.

Infrastructure development is perhaps the most essential requirement of any economy, as every industry can be operational only if this basic need is fulfilled. Besides, the construction industry is a giant contributor to an economy’s wealth and capital stock, while supporting future prospects and functionality.

As the coronavirus pandemic has impacted all of the industries across the globe, the past three months have been a challenge for almost every sector and a terrible period for many. Especially, businesses such as tourism, travel, hotel, and other related and industrial businesses, both domestic as well as international, have been impacted due to the COVID-19 outbreak.

After the declaration of the disease as a pandemic by WHO, many stocks have experienced substantial losses, while several businesses have withdrawn their earnings guidance, suspended their schedules, closed their warehouses, among other measures to tackle the disease impact.

Related: Developments in Industrial Stocks Amidst Covid-19 Pandemic

In this article, we are discussing three ASX-listed industrial stocks- ALX, RWC, SGF.

Atlas Arteria (ASX:ALX)

ASX-listed global operator and developer of toll roads, Atlas Arteria is focused on establishing value for its investors for the long-term through considered and disciplined management. The Company comprises of four businesses. In Germany, it owns 100% of the Warnow Tunnel in the north-east city of Rostock and, in the US, the Company has full (100%) economic interest in the Dulles Greenway.

Market update regarding COVID-19 and distribution guidance

Atlas Arteria has mentioned that the number one priority for the Company is the health and safety of its employee, customers, along with the communities in which it operates. The Company is implementing a pandemic management plan across all of its businesses to lessen exposure for employees, as well as to manage potential cases of coronavirus within its businesses and address operational adjustments required for maintaining continuity in the business.

The Company also announced the Board decision of suspending guidance for the first half 2020 distribution of 18.0 cents per security, given the current uncertainty regarding the length and depth of the pandemic and its impact on traffic.

Meanwhile, the Company disclosed that it remains well positioned in terms of its liquidity. As at 20 March 2020, cash within the head companies amounted to approximately $340 million following receipt of the dividend from the APRR network, which has a very strong balance sheet and liquidity position.

APRR traffic for January and February was strong; however, March traffic experienced a significant impact owing to the progressive lockdowns and other measures undertaken by the French Government.

To Know More, Do Read: Industrial Stocks Suffer From COVID-19 Woes, But Stay Calm Amid Turbulent Market

Stock Performance

The stock of ALX closed the day’s trade at $5.220 on 25 March 2020, up by 1.359% from its previous close, with approximately 879.02 million outstanding shares. With a market capitalisation of almost $4.53 billion, the 52-weeks high and low price of the stock was noted at $8.540 and $3.510, respectively. The annual dividend yield of the stock stood at 5.83%.

Reliance Worldwide Corporation Limited (ASX:RWC)

Australia-based, ASX-listed company, Reliance Worldwide Corporation Limited (ASX:RWC) is engaged in designing, manufacturing as well as supply of water flow and control products such as brass push-to-connect plumbing fittings for use in behind the wall plumbing. The Company present in 44 locations across the world, has 15 manufacturing plants along with five research & development centres.

Withdrawal of Earnings Guidance/Dividend Payment Deferred

On 24 February 2020, RWC provided earnings guidance for the financial year 2020 of an Adjusted Net Profit after Tax (NPAT) in the range of $140 to $150 million.

However, on 25 March 2020, the Company mentioned that given the considerable uncertainty surrounding the potential impact of coronavirus on future operations and financial performance, RWC believes that it is prudent at this time to withdraw earnings guidance for the fiscal year 2020.

Meanwhile, RWC resolved to defer payment of the FY2020 interim dividend (scheduled on 9 April 2020) until later in 2020. The Company intends to pay the interim dividend on 9 October 2020 in addition to the payment of any final dividend for FY2020.

In addition to this, the Company provided trading update and disclosed that sales in January and February 2020 were in line with anticipations. As the demand in March as of now has been strong, Reliance Worldwide is monitoring demand diligently, so that production volumes remain appropriate to meet up sales requirement.

Moreover, RWC also highlighted that currently, its manufacturing facilities and distribution centres in the United States, Australia and the UK remain operational.

Stock Performance

The stock of RWC closed the day’s trade at $1.940, up by 11.494% from its previous close, on 25 March 2020, with approximately 790.09 million outstanding shares. With a market capitalisation of almost $ 1.37 billion, the 52-weeks high and low price of the stock was noted at $ 5.100 and $ 1.630, respectively. The P/E ratio of RWC stock stood at 11.600x, with an annual dividend yield of 5.46%.

Do Read: Effect of Coronavirus and Market Fluctuations

SG Fleet Group Limited (ASX:SGF)

SG Fleet Group Limited is primarily engaged in motor vehicle fleet management, short-term hire vehicle leasing, consumer vehicle finance as well as salary packaging services. The Company has its presence across Australia, as well as in New Zealand and the UK, with more than 700 staff, and manages more than 140,000 assets.

SG Fleet Group has well planned product pipeline-

The Company updated its investors’ presentation on ASX, mentioning its financial results including the outlook.

Financial Highlights-

  • For the first half of FY2020, the Company generated revenue of approximately $250.2 million, up by 0.6% on prior corresponding period (pcp).
  • Underlying Net Profit After Tax (NPAT) of SG Fleet was recorded to be nearly $24.5 million, down by 16.6% on pcp.
  • In the period of June-December 2019, Australian private sector car sales decreased by 6.2% vs. pcp and SG Fleet’s novated car sales went down by 5%.

Outlook-

  • In Australia, a positive outlook on customer and product front in Corporate business.
  • Further boost customer base.
  • Continued progress with penetration of annuity-style services and products.
  • The Company is focused on emerging stronger from a shift in the industry by building on diversified portfolio.
  • Underlying net profit after tax expected between $48 million and $51 million for FY20.

Stock Performance

The stock of SGF settled the day’s trade at $1.030 on 25 March 2020, down by 9.649% from its previous close, with approximately 262.16 million outstanding shares. With a market capitalisation of almost $298.86 million, the 52-weeks high and low price of the stock was noted at $3.250 and $0.960, respectively. The P/E ratio of SGF stock stood at 5.370x, with an annual dividend yield of 14.44%.


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