Reece Ltd (ASX: REH) shares are heading south on Monday after the plumbing products group released its FY26 results.
At the time of writing, the Reece share price is down 5.62% to $15.61. By comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.3% higher to 9,090 points.
The company reported higher revenue for FY26, although profit slipped. Reece also lifted its final dividend, giving shareholders some good news despite the drop in the bottom line.
So, does the result make Reece shares worth buying?
Let's take a closer look.
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Reece lifts its final dividend 13%
Reece declared a fully-franked final dividend of 13.40 cents per share.
That is almost 13% higher than the 11.86 cents per share paid a year earlier.
Combined with the 5.44-cent interim dividend, Reece will pay total dividends of 18.84 cents per share for FY26. That's up 2.6% from 18.36 cents in FY25.
At the current share price of $15.61, the full-year payout gives Reece shares a trailing dividend yield of around 1.2% before franking credits.
Reece shares will trade ex-dividend on 6 October, with the record date on 7 October. The final dividend will then be paid on 21 October.
What did Reece report?
For the 12 months ended 30 June 2026, Reece reported sales revenue of $9.38 billion, up 4.5% from the previous year.
EBITDA was flat at $901 million, while EBIT fell 2.6% to $534 million. Net profit after tax (NPAT) declined 2.8% to $308 million.
Earnings per share (EPS) still increased 0.7% to 49.5 cents.
The Australian and New Zealand business was the stronger part of the result. Sales rose 8.3% to $4.2 billion, while EBITDA increased 7.3% to $532 million as volumes recovered.
Nonetheless, conditions were tougher across the US business. Sales increased 6.5% in US dollar terms, but EBITDA fell 4.5% as weak residential construction weighed on demand.
Reece also continued investing in its US network, opening 25 new branches during the year.
Are Reece shares a buy?
There were some positives in the result, particularly the recovery in Australia and New Zealand and the higher final dividend.
Management expects that momentum in ANZ to continue into FY27, helped by a solid pipeline of activity.
However, the US outlook remains less certain. Reece expects only modest growth there while residential new construction remains weak.
Investors also need to consider the price they are paying.
At $15.61, Reece shares are trading at around 32 times FY26 earnings. That's not cheap for a company that reported lower profit for the year and is still dealing with a weak US housing market.
And while the dividend increase is a positive, the 1.2% trailing yield is unlikely to attract investors looking mainly for income.
