COMMERCIAL METALS CO (CMC) Stock Fundamental Analysis
NYSE:CMC - New York Stock Exchange, Inc. - US2017231034 - Common Stock - Currency: USD
Taking everything into account, CMC scores 6 out of 10 in our fundamental rating. CMC was compared to 154 industry peers in the Metals & Mining industry. CMC scores excellent points on both the profitability and health parts. This is a solid base for a good stock. CMC has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year CMC was profitable.
CMC had a positive operating cash flow in the past year.
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 1.09%, CMC is doing good in the industry, outperforming 61.44% of the companies in the same industry.
Looking at the Return On Equity, with a value of 1.82%, CMC is in the better half of the industry, outperforming 60.13% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.00%, CMC is in the better half of the industry, outperforming 71.24% of the companies in the same industry.
CMC had an Average Return On Invested Capital over the past 3 years of 15.00%. This is above the industry average of 11.16%.
The last Return On Invested Capital (7.00%) for CMC is well below the 3 year average (15.00%), which needs to be investigated, but indicates that CMC had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.09% | ||
| ROE | 1.82% | ||
| ROIC | 7% |
ROA(3y)13.2%
ROA(5y)11.07%
ROE(3y)23.07%
ROE(5y)20.4%
ROIC(3y)15%
ROIC(5y)13.7%
1.3 Margins
CMC has a Profit Margin of 0.94%. This is in the better half of the industry: CMC outperforms 62.75% of its industry peers.
CMC's Profit Margin has improved in the last couple of years.
The Operating Margin of CMC (6.60%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of CMC has grown nicely.
CMC has a Gross Margin (15.39%) which is in line with its industry peers.
In the last couple of years the Gross Margin of CMC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.6% | ||
| PM (TTM) | 0.94% | ||
| GM | 15.39% |
OM growth 3Y-1.14%
OM growth 5Y5.51%
PM growth 3Y-0.05%
PM growth 5Y12.5%
GM growth 3Y1.42%
GM growth 5Y4.5%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CMC is creating some value.
The number of shares outstanding for CMC has been reduced compared to 1 year ago.
Compared to 5 years ago, CMC has less shares outstanding
CMC has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.85 indicates that CMC is not in any danger for bankruptcy at the moment.
CMC has a Altman-Z score of 3.85. This is in the better half of the industry: CMC outperforms 67.32% of its industry peers.
The Debt to FCF ratio of CMC is 2.80, which is a good value as it means it would take CMC, 2.80 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.80, CMC is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
A Debt/Equity ratio of 0.29 indicates that CMC is not too dependend on debt financing.
CMC has a Debt to Equity ratio of 0.29. This is in the lower half of the industry: CMC underperforms 60.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 2.8 | ||
| Altman-Z | 3.85 |
ROIC/WACC0.73
WACC9.53%
2.3 Liquidity
A Current Ratio of 2.82 indicates that CMC has no problem at all paying its short term obligations.
CMC has a better Current ratio (2.82) than 62.75% of its industry peers.
CMC has a Quick Ratio of 1.94. This is a normal value and indicates that CMC is financially healthy and should not expect problems in meeting its short term obligations.
CMC has a better Quick ratio (1.94) than 61.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.94 |
3. Growth
3.1 Past
The earnings per share for CMC have decreased strongly by -52.41% in the last year.
Measured over the past years, CMC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.44% on average per year.
Looking at the last year, CMC shows a decrease in Revenue. The Revenue has decreased by -7.93% in the last year.
The Revenue has been growing slightly by 6.34% on average over the past years.
EPS 1Y (TTM)-52.41%
EPS 3Y7.76%
EPS 5Y16.44%
EPS Q2Q%-70.45%
Revenue 1Y (TTM)-7.93%
Revenue growth 3Y5.6%
Revenue growth 5Y6.34%
Sales Q2Q%-5.08%
3.2 Future
The Earnings Per Share is expected to decrease by -0.50% on average over the next years.
The Revenue is expected to grow by 3.89% on average over the next years.
EPS Next Y-33.26%
EPS Next 2Y-1.65%
EPS Next 3Y-0.5%
EPS Next 5YN/A
Revenue Next Year-1.65%
Revenue Next 2Y3.26%
Revenue Next 3Y3.89%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 15.74, which indicates a correct valuation of CMC.
Based on the Price/Earnings ratio, CMC is valued cheaply inside the industry as 82.35% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of CMC to the average of the S&P500 Index (26.25), we can say CMC is valued slightly cheaper.
CMC is valuated reasonably with a Price/Forward Earnings ratio of 10.87.
Based on the Price/Forward Earnings ratio, CMC is valued a bit cheaper than 69.28% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.15, CMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.74 | ||
| Fwd PE | 10.87 |
4.2 Price Multiples
CMC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CMC is cheaper than 80.39% of the companies in the same industry.
88.89% of the companies in the same industry are more expensive than CMC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.32 | ||
| EV/EBITDA | 7.18 |
4.3 Compensation for Growth
The decent profitability rating of CMC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.96
EPS Next 2Y-1.65%
EPS Next 3Y-0.5%
5. Dividend
5.1 Amount
CMC has a Yearly Dividend Yield of 1.53%.
Compared to an average industry Dividend Yield of 2.97, CMC pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.38, CMC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.53% |
5.2 History
On average, the dividend of CMC grows each year by 7.29%, which is quite nice.
CMC has paid a dividend for at least 10 years, which is 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)7.29%
Div Incr Years4
Div Non Decr Years13
5.3 Sustainability
112.78% of the earnings are spent on dividend by CMC. This is not a sustainable payout ratio.
CMC's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP112.78%
EPS Next 2Y-1.65%
EPS Next 3Y-0.5%
46.59
-0.54 (-1.15%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners92.67%
Inst Owner Change1.6%
Ins Owners0.51%
Ins Owner Change0.67%
Market Cap5.26B
Analysts72.5
Price Target53.21 (14.21%)
Short Float %3.67%
Short Ratio3.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.53% |
Yearly Dividend0.68
Dividend Growth(5Y)7.29%
DP112.78%
Div Incr Years4
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-6.93%
Min EPS beat(2)-10.99%
Max EPS beat(2)-2.86%
EPS beat(4)1
Avg EPS beat(4)-3.41%
Min EPS beat(4)-10.99%
Max EPS beat(4)0.3%
EPS beat(8)4
Avg EPS beat(8)2.73%
EPS beat(12)8
Avg EPS beat(12)6.34%
EPS beat(16)11
Avg EPS beat(16)8.99%
Revenue beat(2)1
Avg Revenue beat(2)0.06%
Min Revenue beat(2)-0.49%
Max Revenue beat(2)0.61%
Revenue beat(4)2
Avg Revenue beat(4)0.17%
Min Revenue beat(4)-1.23%
Max Revenue beat(4)1.79%
Revenue beat(8)6
Avg Revenue beat(8)1.44%
Revenue beat(12)9
Avg Revenue beat(12)1.43%
Revenue beat(16)11
Avg Revenue beat(16)1.3%
PT rev (1m)-0.52%
PT rev (3m)-11.23%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-8.98%
EPS NY rev (1m)-0.58%
EPS NY rev (3m)-7.64%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.54%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.74 | ||
| Fwd PE | 10.87 | ||
| P/S | 0.68 | ||
| P/FCF | 12.32 | ||
| P/OCF | 6.62 | ||
| P/B | 1.31 | ||
| P/tB | 1.54 | ||
| EV/EBITDA | 7.18 |
EPS(TTM)2.96
EY6.35%
EPS(NY)4.28
Fwd EY9.2%
FCF(TTM)3.78
FCFY8.11%
OCF(TTM)7.04
OCFY15.1%
SpS68.48
BVpS35.5
TBVpS30.16
PEG (NY)N/A
PEG (5Y)0.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.09% | ||
| ROE | 1.82% | ||
| ROCE | 9.15% | ||
| ROIC | 7% | ||
| ROICexc | 8.1% | ||
| ROICexgc | 9.26% | ||
| OM | 6.6% | ||
| PM (TTM) | 0.94% | ||
| GM | 15.39% | ||
| FCFM | 5.52% |
ROA(3y)13.2%
ROA(5y)11.07%
ROE(3y)23.07%
ROE(5y)20.4%
ROIC(3y)15%
ROIC(5y)13.7%
ROICexc(3y)17.18%
ROICexc(5y)15.83%
ROICexgc(3y)19.56%
ROICexgc(5y)17.4%
ROCE(3y)19.6%
ROCE(5y)17.94%
ROICexcg growth 3Y-7.72%
ROICexcg growth 5Y2.01%
ROICexc growth 3Y-10.89%
ROICexc growth 5Y-0.05%
OM growth 3Y-1.14%
OM growth 5Y5.51%
PM growth 3Y-0.05%
PM growth 5Y12.5%
GM growth 3Y1.42%
GM growth 5Y4.5%
F-Score4
Asset Turnover1.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 2.8 | ||
| Debt/EBITDA | 1.45 | ||
| Cap/Depr | 129.6% | ||
| Cap/Sales | 4.75% | ||
| Interest Coverage | 10.11 | ||
| Cash Conversion | 100.11% | ||
| Profit Quality | 584.2% | ||
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.94 | ||
| Altman-Z | 3.85 |
F-Score4
WACC9.53%
ROIC/WACC0.73
Cap/Depr(3y)216.7%
Cap/Depr(5y)174.63%
Cap/Sales(3y)5.34%
Cap/Sales(5y)4.44%
Profit Quality(3y)74.95%
Profit Quality(5y)90.31%
High Growth Momentum
Growth
EPS 1Y (TTM)-52.41%
EPS 3Y7.76%
EPS 5Y16.44%
EPS Q2Q%-70.45%
EPS Next Y-33.26%
EPS Next 2Y-1.65%
EPS Next 3Y-0.5%
EPS Next 5YN/A
Revenue 1Y (TTM)-7.93%
Revenue growth 3Y5.6%
Revenue growth 5Y6.34%
Sales Q2Q%-5.08%
Revenue Next Year-1.65%
Revenue Next 2Y3.26%
Revenue Next 3Y3.89%
Revenue Next 5YN/A
EBIT growth 1Y-45.47%
EBIT growth 3Y4.4%
EBIT growth 5Y12.2%
EBIT Next Year16.5%
EBIT Next 3Y13.35%
EBIT Next 5Y9.31%
FCF growth 1Y-34.99%
FCF growth 3Y135.07%
FCF growth 5YN/A
OCF growth 1Y-34%
OCF growth 3Y57.91%
OCF growth 5Y89.31%