Back to top

Image: Bigstock

Here's How Much You'd Have If You Invested $1000 in Reliance Steel a Decade Ago

Read MoreHide Full Article

For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.

FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.

What if you'd invested in Reliance Steel (RS - Free Report) ten years ago? It may not have been easy to hold on to RS for all that time, but if you did, how much would your investment be worth today?

Reliance Steel's Business In-Depth

With that in mind, let's take a look at Reliance Steel's main business drivers.

Los Angeles, CA-based Reliance Steel & Aluminum Co. is a leading metals service center company engaged in value-added materials management and metals processing services. It also distributes over 100,000 metal products to more than 125,000 customers across a vast spectrum of industries. Reliance Steel is the biggest North American metals service center company based on revenues with more than 300 locations.

Reliance Steel recorded net sales of $17,025 million in 2022. Its major products are carbon steel (52% of 2022 sales), aluminum (16%), stainless steel (16%) and alloy (5%).

Reliance has 200 processing and distribution centers spread across 39 states in the United States and in foreign countries such as Belgium, Canada, China, Malaysia, Mexico, Singapore, South Korea and the United Kingdom. Although the company has a diverse geographic presence, the southeastern region of the United States generates majority of its sales.

Reliance Steel provides metals processing services such as cutting-to-length, blanking, slitting, burning, plasma burning, and precision plate sawing, sawing, and shearing, among others, all to customer specifications. These services save time and labor and reduce overall manufacturing costs for the customer.

The company improves its operating results through strategic acquisitions and the expansion of its existing operations. It has made 59 acquisitions since its 1994 Initial public offering (IPO).

The company, in March 2018, completed its purchase of all of the issued and outstanding capital stock of DuBose National Energy Services, Inc. (DuBose Energy) and its affiliate, DuBose National Energy Fasteners & Machined Parts, Inc. (DuBose Fasteners) for an undisclosed price. DuBose Energy and DuBose Fasteners specialize in fabrication, supply and distribution of metal and metal products to the nuclear industry including utilities, component manufacturers and contractors.

Moreover, Reliance Steel, in November 2018, completed the purchase of all of the membership interests of All Metals Holding, LLC, including its operating subsidiaries, All Metals Processing & Logistics, Inc. (“AMPL”) and All Metals Transportation and Logistics, Inc. (“AMTL”). AMPL specializes in toll processing for automotive, construction, appliance and other diverse-end markets.

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Reliance Steel a decade ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in February 2014 would be worth $4,271.58, or a gain of 327.16%, as of February 9, 2024, and this return excludes dividends but includes price increases.

The S&P 500 rose 178.12% and the price of gold increased 54.15% over the same time frame in comparison.

Looking ahead, analysts are expecting more upside for RS.

Earnings estimates for Reliance Steel for the fourth quarter have been stable over the past month. The company is poised to benefit from robust demand across the majority of its end markets throughout 2023. Notably, non-residential construction is experiencing a robust rebound, with expectations of sustained strength in demand for the remainder of 2023, driven by healthy bidding activities. Reliance Steel also observes steady demand in the automotive sector and significant improvements in commercial aerospace and energy markets. It maintains its strategic focus on enhancing operational performance through acquisitions. Moreover, it is dedicated to delivering incremental returns to its shareholders, capitalizing on its strong cash flows. However, lower sequential shipments may affect the top line in the fourth quarter.

The stock is up 5.91% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2023. 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:

Reliance, Inc. (RS) - free report >>

Published in