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Reliance Steel (RS) Rides on Solid Demand & Investments
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Reliance Steel & Aluminum Co. (RS - Free Report) is benefiting from acquisitions, and robust demand in non-residential construction and a majority of its end markets. It is also seeing strong demand in automotive and a rebound in commercial aerospace and energy.
In 2023, the company is expected to benefit from healthy demand in the majority of its end markets as well. RS also remains committed to increasing shareholder returns by leveraging strong cash flows.
Reliance Steel reported adjusted earnings per share of $5.87 in the fourth quarter of 2022, exceeding the Zacks Consensus Estimate of $4.47 per share. Notwithstanding the current macroeconomic concerns, persisting supply-chain disruptions and geopolitical risks, the company expects healthy demand patterns to continue through the first quarter of 2023.
Shares of Reliance Steel, a Zacks Rank #1 (Strong Buy) stock, have gained 32.1% over the past year against the 21.3% decline of its industry.
Image Source: Zacks Investment Research
Reliance Steel is seeing growing demand in its largest end-market, non-residential construction. Despite global microchip shortages, demand for the toll processing services it provides to the automotive market remains stable.
The company is optimistic about its recent investments, which include the purchase of a new facility in Michigan, the emergence of a tolling facility in Indiana, and greenfield tolling projects in Kentucky and Texas. These have all contributed to RS' performance amid market challenges and will act as tailwinds in the expansion of its tolling activities. In addition, the company is witnessing robust demand for semiconductors as well as a recovery in the commercial aerospace and energy markets.
RS also gained through long-term investments toward value addition to state-of-the-art equipment. These investments have brought new processing capabilities, allowing it to increase the percentage of orders, as well as strengthen and upgrade its existing value-added processing equipment, allowing it to improve its service offerings to clients.
Reliance Steel remains committed to offering incremental returns to its shareholders. Its board raised its quarterly dividend by 14.3% to $1.00 per share. Notably, the company has paid regular quarterly dividends for 63 straight years. It repurchased around 3.5 million shares of its common stock for $630.3 million in 2022.
The company returned $847.4 million to its stockholders during 2022 through dividends and repurchases. Reliance Steel also generated cash flow from operations of around $2.1 billion in 2022. It has adequate liquidity to meet its short-term debt obligations.
Other top-ranked stocks worth considering in the basic materials space include Olympic Steel (ZEUS - Free Report) , Steel Dynamics (STLD - Free Report) and Yamana Gold .
Olympic Steel currently sports a Zacks Rank #1. ZEUS’ earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 26.2% on average. ZEUS has rallied around 37.4% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics currently sports a Zacks Rank #1. STLD’s earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 11.3% on average. STLD has rallied around 24.3% in a year.
Yamana Gold currently carries a Zacks Rank #2 (Buy). AUY’s earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 22.5% on average. AUY has gained around 6.7% in a year.
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Reliance Steel (RS) Rides on Solid Demand & Investments
Reliance Steel & Aluminum Co. (RS - Free Report) is benefiting from acquisitions, and robust demand in non-residential construction and a majority of its end markets. It is also seeing strong demand in automotive and a rebound in commercial aerospace and energy.
In 2023, the company is expected to benefit from healthy demand in the majority of its end markets as well. RS also remains committed to increasing shareholder returns by leveraging strong cash flows.
Reliance Steel reported adjusted earnings per share of $5.87 in the fourth quarter of 2022, exceeding the Zacks Consensus Estimate of $4.47 per share. Notwithstanding the current macroeconomic concerns, persisting supply-chain disruptions and geopolitical risks, the company expects healthy demand patterns to continue through the first quarter of 2023.
Shares of Reliance Steel, a Zacks Rank #1 (Strong Buy) stock, have gained 32.1% over the past year against the 21.3% decline of its industry.
Image Source: Zacks Investment Research
Reliance Steel is seeing growing demand in its largest end-market, non-residential construction. Despite global microchip shortages, demand for the toll processing services it provides to the automotive market remains stable.
The company is optimistic about its recent investments, which include the purchase of a new facility in Michigan, the emergence of a tolling facility in Indiana, and greenfield tolling projects in Kentucky and Texas. These have all contributed to RS' performance amid market challenges and will act as tailwinds in the expansion of its tolling activities. In addition, the company is witnessing robust demand for semiconductors as well as a recovery in the commercial aerospace and energy markets.
RS also gained through long-term investments toward value addition to state-of-the-art equipment. These investments have brought new processing capabilities, allowing it to increase the percentage of orders, as well as strengthen and upgrade its existing value-added processing equipment, allowing it to improve its service offerings to clients.
Reliance Steel remains committed to offering incremental returns to its shareholders. Its board raised its quarterly dividend by 14.3% to $1.00 per share. Notably, the company has paid regular quarterly dividends for 63 straight years. It repurchased around 3.5 million shares of its common stock for $630.3 million in 2022.
The company returned $847.4 million to its stockholders during 2022 through dividends and repurchases. Reliance Steel also generated cash flow from operations of around $2.1 billion in 2022. It has adequate liquidity to meet its short-term debt obligations.
Reliance Steel & Aluminum Co. Price and Consensus
Reliance Steel & Aluminum Co. price-consensus-chart | Reliance Steel & Aluminum Co. Quote
Other Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Olympic Steel (ZEUS - Free Report) , Steel Dynamics (STLD - Free Report) and Yamana Gold .
Olympic Steel currently sports a Zacks Rank #1. ZEUS’ earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 26.2% on average. ZEUS has rallied around 37.4% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics currently sports a Zacks Rank #1. STLD’s earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 11.3% on average. STLD has rallied around 24.3% in a year.
Yamana Gold currently carries a Zacks Rank #2 (Buy). AUY’s earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 22.5% on average. AUY has gained around 6.7% in a year.