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.
Reliance Steel & Aluminum Co.’s (RS - Free Report) shares have popped 24.3% over the past three months. The company has also outperformed its industry’s rise of 18.2% over the same time frame. It has also topped the S&P 500’s roughly 3.9% decline over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Image Source: Zacks Investment Research
What’s Aiding RS?
Better-than-expected earnings performance in the fourth quarter of 2022 and upbeat prospects have contributed to the gain in the company's shares. Reliance Steel’s adjusted earnings of $5.87 per share for the fourth quarter trounced the Zacks Consensus Estimate of $4.47. The company envisions healthy demand trends to continue into the first quarter of 2023 notwithstanding the current macroeconomic uncertainty, ongoing supply-chain disruptions and geopolitical factors.
Reliance Steel is witnessing strong underlying demand in its major markets. Demand in non-residential construction, the company’s biggest market, remained healthy in the fourth quarter. The company is optimistic that demand for non-residential construction activity in the key areas in which it operates will remain at healthy levels into the first quarter of 2023.
Reliance Steel also witnessed strength in the semiconductors market in the fourth quarter. The company also saw higher demand for the toll processing services that it provides to the automotive market due to increased production rates by certain automotive manufactures despite the impact of supply-chain challenges.
Additionally, demand in commercial aerospace improved during the quarter and the company is cautiously optimistic that demand will continue to improve in the first quarter. Demand in energy (oil and natural gas) also remained stable year over year in the fourth quarter and the company is cautiously optimistic that demand will improve in the first quarter.
The company has also been following an aggressive acquisition strategy for a while as part of its core business policy to drive operating results. Its latest acquisitions of Rotax Metals, Admiral Metals and Nu-Tech Precision Metals are in sync with its strategy of investing in high-quality businesses.
Reliance Steel also remains committed to boost returns to shareholders. It repurchased around 3.5 million shares of its common stock for $630.3 million in 2022. The company also returned $847.4 million to its stockholders during 2022 through dividends and the repurchases. Reliance Steel has also increased its quarterly dividend by 14.3% to $1.00 per share.
Other top-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Olympic Steel, Inc. (ZEUS - Free Report) and Nucor Corporation (NUE - Free Report) .
Steel Dynamics currently sports a Zacks Rank #1. The Zacks Consensus Estimate for STLD's current-year earnings has been revised 20.1% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has rallied around 60% in a year.
Olympic Steel currently sports a Zacks Rank #1. The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 60.6% upward in the past 60 days.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 26.2%, on average. ZEUS has rallied around 68% in a year.
Nucor currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 10.7% upward in the past 60 days.
Nucor beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average. NUE’s shares have gained roughly 15% in the past year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Reliance Steel's (RS) Shares Rally 24% in 3 Months: Here's Why
Reliance Steel & Aluminum Co.’s (RS - Free Report) shares have popped 24.3% over the past three months. The company has also outperformed its industry’s rise of 18.2% over the same time frame. It has also topped the S&P 500’s roughly 3.9% decline over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Image Source: Zacks Investment Research
What’s Aiding RS?
Better-than-expected earnings performance in the fourth quarter of 2022 and upbeat prospects have contributed to the gain in the company's shares. Reliance Steel’s adjusted earnings of $5.87 per share for the fourth quarter trounced the Zacks Consensus Estimate of $4.47. The company envisions healthy demand trends to continue into the first quarter of 2023 notwithstanding the current macroeconomic uncertainty, ongoing supply-chain disruptions and geopolitical factors.
Reliance Steel is witnessing strong underlying demand in its major markets. Demand in non-residential construction, the company’s biggest market, remained healthy in the fourth quarter. The company is optimistic that demand for non-residential construction activity in the key areas in which it operates will remain at healthy levels into the first quarter of 2023.
Reliance Steel also witnessed strength in the semiconductors market in the fourth quarter. The company also saw higher demand for the toll processing services that it provides to the automotive market due to increased production rates by certain automotive manufactures despite the impact of supply-chain challenges.
Additionally, demand in commercial aerospace improved during the quarter and the company is cautiously optimistic that demand will continue to improve in the first quarter. Demand in energy (oil and natural gas) also remained stable year over year in the fourth quarter and the company is cautiously optimistic that demand will improve in the first quarter.
The company has also been following an aggressive acquisition strategy for a while as part of its core business policy to drive operating results. Its latest acquisitions of Rotax Metals, Admiral Metals and Nu-Tech Precision Metals are in sync with its strategy of investing in high-quality businesses.
Reliance Steel also remains committed to boost returns to shareholders. It repurchased around 3.5 million shares of its common stock for $630.3 million in 2022. The company also returned $847.4 million to its stockholders during 2022 through dividends and the repurchases. Reliance Steel has also increased its quarterly dividend by 14.3% to $1.00 per share.
Reliance Steel & Aluminum Co. Price and Consensus
Reliance Steel & Aluminum Co. price-consensus-chart | Reliance Steel & Aluminum Co. Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Olympic Steel, Inc. (ZEUS - Free Report) and Nucor Corporation (NUE - Free Report) .
Steel Dynamics currently sports a Zacks Rank #1. The Zacks Consensus Estimate for STLD's current-year earnings has been revised 20.1% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has rallied around 60% in a year.
Olympic Steel currently sports a Zacks Rank #1. The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 60.6% upward in the past 60 days.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 26.2%, on average. ZEUS has rallied around 68% in a year.
Nucor currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 10.7% upward in the past 60 days.
Nucor beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average. NUE’s shares have gained roughly 15% in the past year.