COMMERCIAL METALS CO (CMC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMC - US2017231034 - Common Stock
77.52 USD
+0.15 (+0.19%)
77.9719 USD
+0.45 (+0.58%)
We assign a fundamental rating of 6 out of 10 to CMC. CMC was compared to 156 industry peers in the Metals & Mining industry. CMC has only an average score on both its financial health and profitability. A decent growth rate in combination with a cheap valuation! Better keep an eye on CMC. These ratings could make CMC a good candidate for value investing.
1. Profitability
1.1 Basic Checks
- In the past year CMC was profitable.
- In the past year CMC had a positive cash flow from operations.
- In the past 5 years CMC has always been profitable.
- In the past 5 years CMC always reported a positive cash flow from operatings.
1.2 Ratios
- With a decent Return On Assets value of 4.74%, CMC is doing good in the industry, outperforming 74.36% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 10.15%, CMC is in the better half of the industry, outperforming 75.64% of the companies in the same industry.
- CMC has a Return On Invested Capital of 5.82%. This is in the better half of the industry: CMC outperforms 64.74% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for CMC is in line with the industry average of 10.34%.
- The 3 year average ROIC (10.48%) for CMC is well above the current ROIC(5.82%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.74% | ||
| ROE | 10.15% | ||
| ROIC | 5.82% |
ROA(3y)7.08%
ROA(5y)9.93%
ROE(3y)11.39%
ROE(5y)17.84%
ROIC(3y)10.48%
ROIC(5y)13.05%
1.3 Margins
- With a decent Profit Margin value of 5.46%, CMC is doing good in the industry, outperforming 69.23% of the companies in the same industry.
- CMC's Profit Margin has declined in the last couple of years.
- With a decent Operating Margin value of 7.51%, CMC is doing good in the industry, outperforming 61.54% of the companies in the same industry.
- In the last couple of years the Operating Margin of CMC has declined.
- CMC has a Gross Margin of 16.47%. This is comparable to the rest of the industry: CMC outperforms 52.56% of its industry peers.
- In the last couple of years the Gross Margin of CMC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.51% | ||
| PM (TTM) | 5.46% | ||
| GM | 16.47% |
OM growth 3Y-23.36%
OM growth 5Y-5.09%
PM growth 3Y-57%
PM growth 5Y-26.62%
GM growth 3Y-9.09%
GM growth 5Y-1.94%
2. Health
2.1 Basic Checks
- CMC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- Compared to 1 year ago, CMC has less shares outstanding
- Compared to 5 years ago, CMC has less shares outstanding
- Compared to 1 year ago, CMC has a worse debt to assets ratio.
2.2 Solvency
- CMC has an Altman-Z score of 3.39. This indicates that CMC is financially healthy and has little risk of bankruptcy at the moment.
- CMC has a Altman-Z score (3.39) which is comparable to the rest of the industry.
- CMC has a debt to FCF ratio of 11.32. This is a negative value and a sign of low solvency as CMC would need 11.32 years to pay back of all of its debts.
- CMC's Debt to FCF ratio of 11.32 is fine compared to the rest of the industry. CMC outperforms 60.26% of its industry peers.
- A Debt/Equity ratio of 0.77 indicates that CMC is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.77, CMC is doing worse than 80.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 11.32 | ||
| Altman-Z | 3.39 |
ROIC/WACC0.57
WACC10.14%
2.3 Liquidity
- CMC has a Current Ratio of 4.47. This indicates that CMC is financially healthy and has no problem in meeting its short term obligations.
- The Current ratio of CMC (4.47) is better than 77.56% of its industry peers.
- A Quick Ratio of 3.70 indicates that CMC has no problem at all paying its short term obligations.
- Looking at the Quick ratio, with a value of 3.70, CMC is in the better half of the industry, outperforming 73.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.47 | ||
| Quick Ratio | 3.7 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 17.60% over the past year.
- The Earnings Per Share has been growing slightly by 3.60% on average over the past years.
- CMC shows a small growth in Revenue. In the last year, the Revenue has grown by 2.26%.
- The Revenue has been growing slightly by 7.33% on average over the past years.
EPS 1Y (TTM)17.6%
EPS 3Y-27.34%
EPS 5Y3.6%
EPS Q2Q%135.9%
Revenue 1Y (TTM)2.26%
Revenue growth 3Y-4.36%
Revenue growth 5Y7.33%
Sales Q2Q%11.03%
3.2 Future
- Based on estimates for the next years, CMC will show a very strong growth in Earnings Per Share. The EPS will grow by 23.29% on average per year.
- CMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.33% yearly.
EPS Next Y100.29%
EPS Next 2Y40.91%
EPS Next 3Y23.29%
EPS Next 5YN/A
Revenue Next Year15.86%
Revenue Next 2Y11.27%
Revenue Next 3Y7.33%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- CMC is valuated rather expensively with a Price/Earnings ratio of 18.41.
- CMC's Price/Earnings ratio is rather cheap when compared to the industry. CMC is cheaper than 91.03% of the companies in the same industry.
- CMC is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 12.39, the valuation of CMC can be described as correct.
- 82.69% of the companies in the same industry are more expensive than CMC, based on the Price/Forward Earnings ratio.
- The average S&P500 Price/Forward Earnings ratio is at 24.26. CMC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.41 | ||
| Fwd PE | 12.39 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, CMC is valued a bit cheaper than the industry average as 73.72% of the companies are valued more expensively.
- Based on the Price/Free Cash Flow ratio, CMC is valued cheaper than 83.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.07 | ||
| EV/EBITDA | 12.28 |
4.3 Compensation for Growth
- CMC's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- The decent profitability rating of CMC may justify a higher PE ratio.
- CMC's earnings are expected to grow with 23.29% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.18
PEG (5Y)5.12
EPS Next 2Y40.91%
EPS Next 3Y23.29%
5. Dividend
5.1 Amount
- CMC has a yearly dividend return of 0.95%, which is pretty low.
- Compared to an average industry Dividend Yield of 0.96, CMC pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, CMC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.95% |
5.2 History
- On average, the dividend of CMC grows each year by 8.46%, which is quite nice.
- CMC has been paying a dividend for at least 10 years, so it has a reliable track record.
- CMC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.46%
Div Incr Years4
Div Non Decr Years13
5.3 Sustainability
- 18.48% of the earnings are spent on dividend by CMC. This is a low number and sustainable payout ratio.
- The dividend of CMC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP18.48%
EPS Next 2Y40.91%
EPS Next 3Y23.29%
COMMERCIAL METALS CO / CMC FAQ
What is the fundamental rating for CMC stock?
ChartMill assigns a fundamental rating of 6 / 10 to CMC.
What is the valuation status for CMC stock?
ChartMill assigns a valuation rating of 7 / 10 to COMMERCIAL METALS CO (CMC). This can be considered as Undervalued.
What is the profitability of CMC stock?
COMMERCIAL METALS CO (CMC) has a profitability rating of 6 / 10.
Can you provide the PE and PB ratios for CMC stock?
The Price/Earnings (PE) ratio for COMMERCIAL METALS CO (CMC) is 18.41 and the Price/Book (PB) ratio is 2.
What is the expected EPS growth for COMMERCIAL METALS CO (CMC) stock?
The Earnings per Share (EPS) of COMMERCIAL METALS CO (CMC) is expected to grow by 100.29% in the next year.