STEEL DYNAMICS INC (STLD) Stock Fundamental Analysis
NASDAQ:STLD - Nasdaq - US8581191009 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to STLD. STLD was compared to 157 industry peers in the Metals & Mining industry. STLD scores excellent on profitability, but there are some minor concerns on its financial health. STLD has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
STLD had positive earnings in the past year.
STLD had a positive operating cash flow in the past year.
STLD had positive earnings in each of the past 5 years.
In the past 5 years STLD always reported a positive cash flow from operatings.
1.2 Ratios
STLD has a Return On Assets of 6.69%. This is amongst the best in the industry. STLD outperforms 80.89% of its industry peers.
Looking at the Return On Equity, with a value of 11.74%, STLD belongs to the top of the industry, outperforming 82.80% of the companies in the same industry.
STLD has a better Return On Invested Capital (7.28%) than 72.61% of its industry peers.
The Average Return On Invested Capital over the past 3 years for STLD is significantly above the industry average of 12.11%.
The 3 year average ROIC (21.22%) for STLD is well above the current ROIC(7.28%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.69% | ||
| ROE | 11.74% | ||
| ROIC | 7.28% |
ROA(3y)18%
ROA(5y)17.12%
ROE(3y)30.79%
ROE(5y)31.2%
ROIC(3y)21.22%
ROIC(5y)20.87%
1.3 Margins
With a decent Profit Margin value of 6.07%, STLD is doing good in the industry, outperforming 73.89% of the companies in the same industry.
STLD's Profit Margin has improved in the last couple of years.
STLD has a Operating Margin of 7.53%. This is in the better half of the industry: STLD outperforms 61.78% of its industry peers.
In the last couple of years the Operating Margin of STLD has grown nicely.
Looking at the Gross Margin, with a value of 12.55%, STLD is in line with its industry, outperforming 45.22% of the companies in the same industry.
In the last couple of years the Gross Margin of STLD has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.53% | ||
| PM (TTM) | 6.07% | ||
| GM | 12.55% |
OM growth 3Y-22.02%
OM growth 5Y3.27%
PM growth 3Y-20.53%
PM growth 5Y6.45%
GM growth 3Y-18.14%
GM growth 5Y1.78%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), STLD is creating value.
Compared to 1 year ago, STLD has less shares outstanding
The number of shares outstanding for STLD has been reduced compared to 5 years ago.
The debt/assets ratio for STLD is higher compared to a year ago.
2.2 Solvency
STLD has an Altman-Z score of 4.69. This indicates that STLD is financially healthy and has little risk of bankruptcy at the moment.
STLD has a better Altman-Z score (4.69) than 71.34% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that STLD is not too dependend on debt financing.
STLD's Debt to Equity ratio of 0.43 is on the low side compared to the rest of the industry. STLD is outperformed by 73.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 4.69 |
ROIC/WACC0.8
WACC9.05%
2.3 Liquidity
A Current Ratio of 3.13 indicates that STLD has no problem at all paying its short term obligations.
STLD has a Current ratio of 3.13. This is in the better half of the industry: STLD outperforms 64.97% of its industry peers.
STLD has a Quick Ratio of 1.34. This is a normal value and indicates that STLD is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of STLD (1.34) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.13 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
The earnings per share for STLD have decreased strongly by -44.99% in the last year.
The Earnings Per Share has been growing by 25.97% on average over the past years. This is a very strong growth
Looking at the last year, STLD shows a decrease in Revenue. The Revenue has decreased by -5.51% in the last year.
Measured over the past years, STLD shows a quite strong growth in Revenue. The Revenue has been growing by 10.88% on average per year.
EPS 1Y (TTM)-44.99%
EPS 3Y-15.5%
EPS 5Y25.97%
EPS Q2Q%-26.1%
Revenue 1Y (TTM)-5.51%
Revenue growth 3Y-1.6%
Revenue growth 5Y10.88%
Sales Q2Q%-1.46%
3.2 Future
Based on estimates for the next years, STLD will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.93% on average per year.
The Revenue is expected to grow by 5.15% on average over the next years.
EPS Next Y2.18%
EPS Next 2Y14.49%
EPS Next 3Y14.36%
EPS Next 5Y9.93%
Revenue Next Year5.19%
Revenue Next 2Y6.01%
Revenue Next 3Y5.15%
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
With a Price/Earnings ratio of 17.82, STLD is valued on the expensive side.
STLD's Price/Earnings ratio is a bit cheaper when compared to the industry. STLD is cheaper than 78.34% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.99. STLD is valued slightly cheaper when compared to this.
STLD is valuated reasonably with a Price/Forward Earnings ratio of 9.51.
Based on the Price/Forward Earnings ratio, STLD is valued cheaply inside the industry as 82.17% of the companies are valued more expensively.
STLD's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 36.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.82 | ||
| Fwd PE | 9.51 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, STLD is valued a bit cheaper than the industry average as 65.61% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 11.96 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates STLD does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of STLD may justify a higher PE ratio.
STLD's earnings are expected to grow with 14.36% in the coming years. This may justify a more expensive valuation.
PEG (NY)8.17
PEG (5Y)0.69
EPS Next 2Y14.49%
EPS Next 3Y14.36%
5. Dividend
5.1 Amount
STLD has a Yearly Dividend Yield of 1.57%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.86, STLD pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.40, STLD is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.57% |
5.2 History
On average, the dividend of STLD grows each year by 14.82%, which is quite nice.
STLD has been paying a dividend for at least 10 years, so it has a reliable track record.
STLD has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)14.82%
Div Incr Years12
Div Non Decr Years14
5.3 Sustainability
STLD pays out 27.49% of its income as dividend. This is a sustainable payout ratio.
The dividend of STLD is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP27.49%
EPS Next 2Y14.49%
EPS Next 3Y14.36%
122.23
-1.3 (-1.05%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners84.98%
Inst Owner Change-0.03%
Ins Owners6.22%
Ins Owner Change0.94%
Market Cap18.15B
Analysts78.1
Price Target151.97 (24.33%)
Short Float %2.44%
Short Ratio2.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.57% |
Yearly Dividend1.82
Dividend Growth(5Y)14.82%
DP27.49%
Div Incr Years12
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.04%
Min EPS beat(2)-6.16%
Max EPS beat(2)2.08%
EPS beat(4)3
Avg EPS beat(4)0.55%
Min EPS beat(4)-6.16%
Max EPS beat(4)4.52%
EPS beat(8)4
Avg EPS beat(8)-0.02%
EPS beat(12)7
Avg EPS beat(12)2.29%
EPS beat(16)10
Avg EPS beat(16)2.62%
Revenue beat(2)1
Avg Revenue beat(2)-1.9%
Min Revenue beat(2)-5.89%
Max Revenue beat(2)2.08%
Revenue beat(4)2
Avg Revenue beat(4)-1.49%
Min Revenue beat(4)-5.89%
Max Revenue beat(4)2.08%
Revenue beat(8)5
Avg Revenue beat(8)-0.72%
Revenue beat(12)7
Avg Revenue beat(12)-1.55%
Revenue beat(16)9
Avg Revenue beat(16)-0.84%
PT rev (1m)0.39%
PT rev (3m)2.27%
EPS NQ rev (1m)-15.1%
EPS NQ rev (3m)6.82%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)-1.08%
Revenue NQ rev (1m)-2.08%
Revenue NQ rev (3m)2.58%
Revenue NY rev (1m)-0.44%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.82 | ||
| Fwd PE | 9.51 | ||
| P/S | 1.06 | ||
| P/FCF | N/A | ||
| P/OCF | 11.62 | ||
| P/B | 2.05 | ||
| P/tB | 2.22 | ||
| EV/EBITDA | 11.96 |
EPS(TTM)6.86
EY5.61%
EPS(NY)12.85
Fwd EY10.51%
FCF(TTM)-0.72
FCFYN/A
OCF(TTM)10.51
OCFY8.6%
SpS115.51
BVpS59.71
TBVpS55.06
PEG (NY)8.17
PEG (5Y)0.69
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.69% | ||
| ROE | 11.74% | ||
| ROCE | 9.4% | ||
| ROIC | 7.28% | ||
| ROICexc | 7.55% | ||
| ROICexgc | 7.97% | ||
| OM | 7.53% | ||
| PM (TTM) | 6.07% | ||
| GM | 12.55% | ||
| FCFM | N/A |
ROA(3y)18%
ROA(5y)17.12%
ROE(3y)30.79%
ROE(5y)31.2%
ROIC(3y)21.22%
ROIC(5y)20.87%
ROICexc(3y)25.25%
ROICexc(5y)24.52%
ROICexgc(3y)27.22%
ROICexgc(5y)26.63%
ROCE(3y)27.41%
ROCE(5y)26.96%
ROICexcg growth 3Y-30.82%
ROICexcg growth 5Y-3.41%
ROICexc growth 3Y-30.22%
ROICexc growth 5Y-1.67%
OM growth 3Y-22.02%
OM growth 5Y3.27%
PM growth 3Y-20.53%
PM growth 5Y6.45%
GM growth 3Y-18.14%
GM growth 5Y1.78%
F-Score5
Asset Turnover1.1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 2.09 | ||
| Cap/Depr | 325.08% | ||
| Cap/Sales | 9.73% | ||
| Interest Coverage | 11.34 | ||
| Cash Conversion | 86.52% | ||
| Profit Quality | N/A | ||
| Current Ratio | 3.13 | ||
| Quick Ratio | 1.34 | ||
| Altman-Z | 4.69 |
F-Score5
WACC9.05%
ROIC/WACC0.8
Cap/Depr(3y)335.1%
Cap/Depr(5y)332.49%
Cap/Sales(3y)7.85%
Cap/Sales(5y)8.3%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-44.99%
EPS 3Y-15.5%
EPS 5Y25.97%
EPS Q2Q%-26.1%
EPS Next Y2.18%
EPS Next 2Y14.49%
EPS Next 3Y14.36%
EPS Next 5Y9.93%
Revenue 1Y (TTM)-5.51%
Revenue growth 3Y-1.6%
Revenue growth 5Y10.88%
Sales Q2Q%-1.46%
Revenue Next Year5.19%
Revenue Next 2Y6.01%
Revenue Next 3Y5.15%
Revenue Next 5YN/A
EBIT growth 1Y-49.62%
EBIT growth 3Y-23.27%
EBIT growth 5Y14.51%
EBIT Next Year25.38%
EBIT Next 3Y17.98%
EBIT Next 5Y13.65%
FCF growth 1Y-103.57%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-62.67%
OCF growth 3Y-5.76%
OCF growth 5Y5.73%