We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's How Much You'd Have If You Invested $1000 in Steel Dynamics a Decade Ago
Read MoreHide Full Article
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Steel Dynamics (STLD - Free Report) ten years ago? It may not have been easy to hold on to STLD for all that time, but if you did, how much would your investment be worth today?
Steel Dynamics' Business In-Depth
With that in mind, let's take a look at Steel Dynamics' main business drivers.
Based in Fort Wayne, IN, Steel Dynamics, Inc. is among the leading steel producers and metal recyclers in the United States. It currently has steelmaking and coating capacity of more than 11 million tons. It is one of the most diversified steel companies in United States with a vast range of specialty products. The company makes and markets steel products, processes and sells recycled ferrous and nonferrous metals, and fabricates and sells steel joist and decking products in the United States and internationally.
Steel Dynamics operates through three segments – Steel Operations (74% of revenues in 2020), Metals Recycling Operations (11%) and Steel Fabrication Operations (9%). Other operations, which include subsidiary operations, accounted for the balance of revenues in 2020.
Steel Operations: The unit produces steel from ferrous scrap and scrap substitutes and consists of six electric arc furnace steel mills. It mainly consists of steelmaking and coating operations. Products made at the unit are used in a number of industries including construction, automotive, manufacturing and transportation.
Metals Recycling Operations: The operations of the division include ferrous and nonferrous scrap metal processing, transportation, marketing and brokerage services. The unit purchases, processes and resales ferrous and nonferrous scrap metals into reusable forms and grades. End-users of these products include electric arc furnace steel mills, integrated steelmakers, foundries, secondary smelters and metal brokers.
Steel Fabrication Operations: The unit produces steel building components, including steel joists, girders, trusses and steel deck. The division’s main customers are non-residential steel fabricators.
Steel Dynamics, in 2018, acquired Heartland Steel Processing, LLC from CSN Steel, S.L.U., for $400 million. 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. It has a continuous pickle line, a cold mill and a galvanizing line. Moreover, its equipment is well-maintained, upgraded and in excellent operating condition.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Steel Dynamics, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in May 2011 would be worth $3,190.77, or a 219.08% gain, as of May 4, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 209.05% and gold's return of 13.59% over the same time frame.
Analysts are forecasting more upside for STLD too.
Steel Dynamics’ adjusted earnings and sales for the first quarter beat the respective Zacks Consensus Estimate. The company is expected to gain from acquisitions as well as strong liquidity and efforts to expand capacity. The acquisitions of Heartland and United Steel Supply have boosted Steel Dynamics' shipping capabilities. Moreover, the buyout of Zimmer will support its raw material procurement strategy at its new Texas flat roll steel mill. The company is also expected to gain from its investments to beef up capacity and upgrade facilities. It is executing a number of projects that should add to capacity and boost profitability. The electric-arc-furnace (EAF) flat roll steel mill will strengthen its steelmaking capacity and value-added product capability. The company also has adequate liquidity to meet its short-term debt obligation.
Over the past four weeks, shares have rallied 9.42%, and there have been 4 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's How Much You'd Have If You Invested $1000 in Steel Dynamics a Decade Ago
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Steel Dynamics (STLD - Free Report) ten years ago? It may not have been easy to hold on to STLD for all that time, but if you did, how much would your investment be worth today?
Steel Dynamics' Business In-Depth
With that in mind, let's take a look at Steel Dynamics' main business drivers.
Based in Fort Wayne, IN, Steel Dynamics, Inc. is among the leading steel producers and metal recyclers in the United States. It currently has steelmaking and coating capacity of more than 11 million tons. It is one of the most diversified steel companies in United States with a vast range of specialty products. The company makes and markets steel products, processes and sells recycled ferrous and nonferrous metals, and fabricates and sells steel joist and decking products in the United States and internationally.
Steel Dynamics operates through three segments – Steel Operations (74% of revenues in 2020), Metals Recycling Operations (11%) and Steel Fabrication Operations (9%). Other operations, which include subsidiary operations, accounted for the balance of revenues in 2020.
Steel Operations: The unit produces steel from ferrous scrap and scrap substitutes and consists of six electric arc furnace steel mills. It mainly consists of steelmaking and coating operations. Products made at the unit are used in a number of industries including construction, automotive, manufacturing and transportation.
Metals Recycling Operations: The operations of the division include ferrous and nonferrous scrap metal processing, transportation, marketing and brokerage services. The unit purchases, processes and resales ferrous and nonferrous scrap metals into reusable forms and grades. End-users of these products include electric arc furnace steel mills, integrated steelmakers, foundries, secondary smelters and metal brokers.
Steel Fabrication Operations: The unit produces steel building components, including steel joists, girders, trusses and steel deck. The division’s main customers are non-residential steel fabricators.
Steel Dynamics, in 2018, acquired Heartland Steel Processing, LLC from CSN Steel, S.L.U., for $400 million. 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. It has a continuous pickle line, a cold mill and a galvanizing line. Moreover, its equipment is well-maintained, upgraded and in excellent operating condition.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Steel Dynamics, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in May 2011 would be worth $3,190.77, or a 219.08% gain, as of May 4, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 209.05% and gold's return of 13.59% over the same time frame.
Analysts are forecasting more upside for STLD too.
Steel Dynamics’ adjusted earnings and sales for the first quarter beat the respective Zacks Consensus Estimate. The company is expected to gain from acquisitions as well as strong liquidity and efforts to expand capacity. The acquisitions of Heartland and United Steel Supply have boosted Steel Dynamics' shipping capabilities. Moreover, the buyout of Zimmer will support its raw material procurement strategy at its new Texas flat roll steel mill. The company is also expected to gain from its investments to beef up capacity and upgrade facilities. It is executing a number of projects that should add to capacity and boost profitability. The electric-arc-furnace (EAF) flat roll steel mill will strengthen its steelmaking capacity and value-added product capability. The company also has adequate liquidity to meet its short-term debt obligation.
Over the past four weeks, shares have rallied 9.42%, and there have been 4 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.