Houston Wire & Cable: A Buy And Hold Dividend Play

Over the past several years, Houston Wire & Cable (Nasdaq: HWCC) has been about as consistent as it gets with its sales. It is dependably at $90-$100 million per quarter, with only a few outliers slightly above or below, and gross margins that are dependably in the same range.This year is different, with the company missing its Q1 estimates, coming in at a mere $81.6 million, even worse than the already pessimistic projections.HWCC data by YChartsThe market punished the stock, as they are wont to do, but just kept punishing it as the weeks went on, driving the stock to a string of new 52-week lows. Today, we're going to look at Houston Wire & Cable's financials and estimates, and whether the stock has been beaten down so much it is entering a value/income range.Who it isAs you might well imagine, Houston Wire & Cable is a company that sells wire and cable. It's a pretty boring business, which I personally like, because there aren't a bunch of nuances for us to worry about. It buys the wire, sells the wire, and it distributes the wire. Wash, rinse, repeat.It's a simple model that works really well. Going through every 10-Q, you'll find a gross margin of 21%, give or take a tiny bit, regardless of how much the company sells. It generates a nice, dependable profit, with nice, dependable cash flow, and has been paying growing dividends.The dividend trendThere's only so much wire to sell, so the real value in Houston Wire & Cable from an... Read more

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