COMMERCIAL METALS CO (CMC)
US2017231034 - Common Stock
We assign a fundamental rating of 7 out of 10 to CMC. CMC was compared to 155 industry peers in the Metals & Mining industry. Both the health and profitability get an excellent rating, making CMC a very profitable company, without any liquidiy or solvency issues. CMC is cheap, but on the other hand it scores bad on growth. These ratings could make CMC a good candidate for value investing.
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.
Each year in the past 5 years CMC has been profitable.
Each year in the past 5 years CMC had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 10.21%, CMC belongs to the best of the industry, outperforming 89.03% of the companies in the same industry.
CMC has a better Return On Equity (16.11%) than 85.81% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.45%, CMC belongs to the top of the industry, outperforming 85.81% of the companies in the same industry.
CMC had an Average Return On Invested Capital over the past 3 years of 16.68%. This is significantly above the industry average of 9.16%.
The last Return On Invested Capital (12.45%) for CMC is well below the 3 year average (16.68%), which needs to be investigated, but indicates that CMC had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.21% | ||
| ROE | 16.11% | ||
| ROIC | 12.45% |
ROA(3y)13.79%
ROA(5y)10.7%
ROE(3y)25.3%
ROE(5y)20.58%
ROIC(3y)16.68%
ROIC(5y)14.23%
1.3 Margins
Looking at the Profit Margin, with a value of 8.09%, CMC is in the better half of the industry, outperforming 74.19% of the companies in the same industry.
In the last couple of years the Profit Margin of CMC has grown nicely.
CMC has a better Operating Margin (11.13%) than 66.45% of its industry peers.
CMC's Operating Margin has improved in the last couple of years.
CMC's Gross Margin of 19.19% is in line compared to the rest of the industry. CMC outperforms 57.42% of its industry peers.
In the last couple of years the Gross Margin of CMC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.13% | ||
| PM (TTM) | 8.09% | ||
| GM | 19.19% |
OM growth 3Y15.32%
OM growth 5Y22.05%
PM growth 3Y24.17%
PM growth 5Y26.79%
GM growth 3Y6.08%
GM growth 5Y8.73%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CMC is creating 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 an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.60 indicates that CMC is not in any danger for bankruptcy at the moment.
CMC has a better Altman-Z score (4.60) than 71.61% of its industry peers.
The Debt to FCF ratio of CMC is 1.77, which is an excellent value as it means it would take CMC, only 1.77 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.77, CMC belongs to the top of the industry, outperforming 81.94% of the companies in the same industry.
CMC has a Debt/Equity ratio of 0.27. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of CMC (0.27) is worse than 60.65% of its industry peers.
Although CMC does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 1.77 | ||
| Altman-Z | 4.6 |
ROIC/WACC1.5
WACC8.32%
2.3 Liquidity
A Current Ratio of 4.19 indicates that CMC has no problem at all paying its short term obligations.
CMC's Current ratio of 4.19 is fine compared to the rest of the industry. CMC outperforms 75.48% of its industry peers.
A Quick Ratio of 2.69 indicates that CMC has no problem at all paying its short term obligations.
CMC has a Quick ratio of 2.69. This is in the better half of the industry: CMC outperforms 70.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.19 | ||
| Quick Ratio | 2.69 |
3. Growth
3.1 Past
CMC shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -28.83%.
Measured over the past years, CMC shows a very strong growth in Earnings Per Share. The EPS has been growing by 40.92% on average per year.
Looking at the last year, CMC shows a decrease in Revenue. The Revenue has decreased by -8.32% in the last year.
The Revenue has been growing by 13.64% on average over the past years. This is quite good.
EPS 1Y (TTM)-28.83%
EPS 3Y40.93%
EPS 5Y40.92%
EPS growth Q2Q-38.89%
Revenue 1Y (TTM)-8.32%
Revenue growth 3Y17.13%
Revenue growth 5Y13.64%
Revenue growth Q2Q-8.41%
3.2 Future
The Earnings Per Share is expected to decrease by -23.13% on average over the next years. This is quite bad
Based on estimates for the next years, CMC will show a decrease in Revenue. The Revenue will decrease by -2.70% on average per year.
EPS Next Y-30.89%
EPS Next 2Y-18.7%
EPS Next 3Y-23.13%
EPS Next 5YN/A
Revenue Next Year-8.62%
Revenue Next 2Y-4.17%
Revenue Next 3Y-2.7%
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 decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 8.60, the valuation of CMC can be described as very reasonable.
89.68% of the companies in the same industry are more expensive than CMC, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 25.20, CMC is valued rather cheaply.
CMC is valuated reasonably with a Price/Forward Earnings ratio of 10.95.
Based on the Price/Forward Earnings ratio, CMC is valued cheaper than 85.81% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.63. CMC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.6 | ||
| Fwd PE | 10.95 |
4.2 Price Multiples
CMC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CMC is cheaper than 81.29% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CMC indicates a rather cheap valuation: CMC is cheaper than 88.39% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.42 | ||
| EV/EBITDA | 5.66 |
4.3 Compensation for Growth
CMC has an outstanding profitability rating, which may justify a higher PE ratio.
CMC's earnings are expected to decrease with -23.13% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)0.21
EPS Next 2Y-18.7%
EPS Next 3Y-23.13%
5. Dividend
5.1 Amount
CMC has a Yearly Dividend Yield of 1.30%.
CMC's Dividend Yield is a higher than the industry average which is at 2.88.
Compared to an average S&P500 Dividend Yield of 2.44, CMC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.3% |
5.2 History
The dividend of CMC has a limited annual growth rate of 5.84%.
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)5.84%
Div Incr Years3
Div Non Decr Years12
5.3 Sustainability
CMC pays out 10.99% of its income as dividend. This is a sustainable payout ratio.
DP10.99%
EPS Next 2Y-18.7%
EPS Next 3Y-23.13%
COMMERCIAL METALS CO
NYSE:CMC (4/26/2024, 3:10:04 PM)
After market: 53.48 0 (0%)53.48
-0.23 (-0.43%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap6.19B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.3% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.6 | ||
| Fwd PE | 10.95 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)0.21
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.21% | ||
| ROE | 16.11% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 11.13% | ||
| PM (TTM) | 8.09% | ||
| GM | 19.19% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.26
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 4.19 | ||
| Quick Ratio | 2.69 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-28.83%
EPS 3Y40.93%
EPS 5Y
EPS growth Q2Q
EPS Next Y-30.89%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-8.32%
Revenue growth 3Y17.13%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y