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5 Reasons to Add Steel Dynamics (STLD) to Your Portfolio Now
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Steel Dynamics, Inc.'s (STLD - Free Report) stock looks promising at the moment. The company has seen its shares rise around 10% year to date. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this steel maker an attractive investment option.
What’s Working in Favor of STLD?
Solid Rank & VGM Score: Steel Dynamics currently sports a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: Steel Dynamics has outperformed the industry over a year. The company’s shares have rallied around 28.8% over this period, compared with roughly 12.1% growth recorded by the industry.
Solid Growth Prospects: The Zacks Consensus Estimate for earnings for 2018 for Steel Dynamics is currently pegged at $5.27, reflecting an expected year-over-year growth of 98.8%. Moreover, earnings are expected to register a 138.1% growth in second-quarter 2018. The company also has an expected long-term earnings per share growth rate of 12%, higher than the industry average of 8.3%.
Superior Return on Equity (ROE): Steel Dynamics’ ROE of 21.6%, as compared with the industry average of 12.3%, manifests the company’s efficiency in utilizing shareholder’s funds.
Upbeat Prospects: Steel Dynamics, last month, provided strong earnings guidance for second-quarter 2018. The company expects earnings for the quarter in the band of $1.46 to $1.50 per share. That is an increase from 96 cents per share recorded in the previous quarter and 63 cents per share it earned a year ago.
Steel Dynamics expects profitability from its steel operations to improve meaningfully on a sequential comparison basis in the second quarter on the back of higher steel shipments and metal spread expansion. Also, average quarterly steel product prices are expected to increase more than scrap costs. The company noted that prices of steel across the platform improved throughout the quarter aided by strong steel demand in the domestic market.
Steel Dynamics expects steel consumption and market dynamics to remain strong during 2018, supported by strong steel demand fundamentals and customer optimism.
Steel Dynamics continues to generate strong cash flows and strengthen financial position. The company also remains committed to deliver shareholder value through strategic and organic growth opportunities. The company should also benefit from its strategic acquisitions.
Steel Dynamics, last month, completed its buyout of Companhia Siderurgica Nacional, LLC (Heartland) from CSN Steel, S.L.U., for $400 million in cash. Heartland produces a range of higher-margin, flat roll steel by further processing hot roll coils into cold roll, pickle and oil and galvanized products. It has the capability to produce 1 million tons of cold roll steel annually, with galvanizing capacity of 360,000 tons.
The acquisition is expected to increase Steel Dynamics' total shipping capability and annual flat roll steel shipping capacity to 12.4 million tons and 8.4 million tons, respectively. The additional exposure to lighter-gauge and greater width flat roll steel offerings will also expand its portfolio of value-added products, boosting Steel Dynamics’ position as a leading steel producer in North America.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have shot up roughly 44% over a year.
Methanex has an expected long-term earnings growth rate of 15%. The company’s shares have rallied around 59% in a year.
BHP Billiton has an expected long-term earnings growth rate of 5.3%. Its shares have gained roughly 24% over a year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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5 Reasons to Add Steel Dynamics (STLD) to Your Portfolio Now
Steel Dynamics, Inc.'s (STLD - Free Report) stock looks promising at the moment. The company has seen its shares rise around 10% year to date. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this steel maker an attractive investment option.
What’s Working in Favor of STLD?
Solid Rank & VGM Score: Steel Dynamics currently sports a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: Steel Dynamics has outperformed the industry over a year. The company’s shares have rallied around 28.8% over this period, compared with roughly 12.1% growth recorded by the industry.
Solid Growth Prospects: The Zacks Consensus Estimate for earnings for 2018 for Steel Dynamics is currently pegged at $5.27, reflecting an expected year-over-year growth of 98.8%. Moreover, earnings are expected to register a 138.1% growth in second-quarter 2018. The company also has an expected long-term earnings per share growth rate of 12%, higher than the industry average of 8.3%.
Superior Return on Equity (ROE): Steel Dynamics’ ROE of 21.6%, as compared with the industry average of 12.3%, manifests the company’s efficiency in utilizing shareholder’s funds.
Upbeat Prospects: Steel Dynamics, last month, provided strong earnings guidance for second-quarter 2018. The company expects earnings for the quarter in the band of $1.46 to $1.50 per share. That is an increase from 96 cents per share recorded in the previous quarter and 63 cents per share it earned a year ago.
Steel Dynamics expects profitability from its steel operations to improve meaningfully on a sequential comparison basis in the second quarter on the back of higher steel shipments and metal spread expansion. Also, average quarterly steel product prices are expected to increase more than scrap costs. The company noted that prices of steel across the platform improved throughout the quarter aided by strong steel demand in the domestic market.
Steel Dynamics expects steel consumption and market dynamics to remain strong during 2018, supported by strong steel demand fundamentals and customer optimism.
Steel Dynamics continues to generate strong cash flows and strengthen financial position. The company also remains committed to deliver shareholder value through strategic and organic growth opportunities. The company should also benefit from its strategic acquisitions.
Steel Dynamics, last month, completed its buyout of Companhia Siderurgica Nacional, LLC (Heartland) from CSN Steel, S.L.U., for $400 million in cash. Heartland produces a range of higher-margin, flat roll steel by further processing hot roll coils into cold roll, pickle and oil and galvanized products. It has the capability to produce 1 million tons of cold roll steel annually, with galvanizing capacity of 360,000 tons.
The acquisition is expected to increase Steel Dynamics' total shipping capability and annual flat roll steel shipping capacity to 12.4 million tons and 8.4 million tons, respectively. The additional exposure to lighter-gauge and greater width flat roll steel offerings will also expand its portfolio of value-added products, boosting Steel Dynamics’ position as a leading steel producer in North America.
Steel Dynamics, Inc. Price and Consensus
Steel Dynamics, Inc. Price and Consensus | Steel Dynamics, Inc. Quote
Other Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include KMG Chemicals, Inc. , Methanex Corporation (MEOH - Free Report) and BHP Billiton Limited (BHP - Free Report) , each carrying a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have shot up roughly 44% over a year.
Methanex has an expected long-term earnings growth rate of 15%. The company’s shares have rallied around 59% in a year.
BHP Billiton has an expected long-term earnings growth rate of 5.3%. Its shares have gained roughly 24% over a year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>