CMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 156 industry peers in the Metals & Mining industry. CMC has an average financial health and profitability rating. CMC may be a bit undervalued, certainly considering the very reasonable score on growth This makes CMC very considerable for value investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

CMC had positive earnings in the past year.
In the past year CMC had a positive cash flow from operations.
In the past 5 years CMC has always been profitable.
CMC had a positive operating cash flow in each of the past 5 years.

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.
CMC has a better Return On Equity (10.15%) than 75.64% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.82%, CMC is in the better half of the industry, outperforming 64.74% of the companies in the same industry.
CMC had an Average Return On Invested Capital over the past 3 years of 10.48%. This is in line with the industry average of 10.34%.
The last Return On Invested Capital (5.82%) for CMC is well below the 3 year average (10.48%), which needs to be investigated, but indicates that CMC had better years and this may not be a problem.

		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

CMC's Profit Margin of 5.46% is fine compared to the rest of the industry. CMC outperforms 69.23% of its industry peers.
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.
CMC's Operating Margin has declined in the last couple of years.
CMC has a Gross Margin (16.47%) which is in line with 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%

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ROA

ROE

ROIC

Operating and Profit Margin

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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.
Compared to 1 year ago, CMC has less shares outstanding
The number of shares outstanding for CMC has been reduced compared to 5 years ago.
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.
Looking at the Altman-Z score, with a value of 3.39, CMC is in line with its industry, outperforming 45.51% of the companies in the same industry.
The Debt to FCF ratio of CMC is 11.32, which is on the high side as it means it would take CMC, 11.32 years of fcf income to pay off all of its debts.
CMC has a better Debt to FCF ratio (11.32) than 60.26% of its industry peers.
A Debt/Equity ratio of 0.77 indicates that CMC is somewhat dependend on debt financing.
CMC's Debt to Equity ratio of 0.77 is on the low side compared to the rest of the industry. CMC is outperformed by 80.13% of its industry peers.

		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.
CMC has a better Current ratio (4.47) 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

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WACC

Debt/Equity

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Altman-Z score

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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.
The Revenue has been growing slightly by 2.26% in the past year.
CMC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.33% yearly.

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.
Based on estimates for the next years, CMC will show a small growth in Revenue. The Revenue will grow by 7.33% on average per year.

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

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 18.41, the valuation of CMC can be described as rather expensive.
Based on the Price/Earnings ratio, CMC is valued cheaper than 91.03% of the companies in the same industry.
CMC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.21.
CMC is valuated correctly with a Price/Forward Earnings ratio of 12.39.
CMC's Price/Forward Earnings ratio is rather cheap when compared to the industry. CMC is cheaper than 82.69% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of CMC to the average of the S&P500 Index (24.26), we can say CMC is valued slightly cheaper.

		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

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
CMC has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as CMC's earnings are expected to grow with 23.29% in the coming years.

PEG (NY)0.18

PEG (5Y)5.12

EPS Next 2Y40.91%

EPS Next 3Y23.29%

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5. Dividend

5.1 Amount

CMC has a yearly dividend return of 0.95%, which is pretty low.
CMC's Dividend Yield is a higher than the industry average which is at 0.96.
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 paid a dividend for at least 10 years, which is a reliable track record.
CMC has not decreased their dividend for at least 10 years, which is a reliable track record.

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.
CMC's earnings are growing more than its dividend. This makes the dividend growth sustainable.

DP18.48%

EPS Next 2Y40.91%

EPS Next 3Y23.29%

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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.