The Company in a Nutshell
- STLD is vertically integrated to use recycled ferrous scrap metal.
- STLD use mini mills vs blast furnace for most steelmakers.
- This allows additional flexibility in production and cost advantage.
- We do not cover Steel Dynamics at the moment.
Date Reviewed | N/A |
Company Name | Steel Dynamics Inc |
Symbol | STLD |
Sector | Materials |
Industry | Steel |
Beta | 1.328 |
PRO Rating | 3 |
Dividend Safety | 3 |
Business Model
Steel Dynamics, Inc. is a steel producer and metal recycler in the North America. Its segments include Steel Operations, Metals Recycling Operations, Steel Fabrication Operations and Aluminum Operations. Steel Operations segment consists primarily of steelmaking and various coating operations. Metals Recycling operations segment include both ferrous and nonferrous scrap metal processing, transportation, marketing, brokerage and scrap management services, strategically located primarily in close proximity to its steel mills and other end-user scrap consumers, across the United States, and Central and Northern Mexico. Steel fabrication operations segment include seven new millennium building systems plants that primarily serve the nonresidential construction industry across the United States. The Aluminum Operations includes the recycled aluminum flat rolled products mill being constructed in Columbus, Mississippi, and two satellite recycled aluminum slab centers in Arizona and Mexico.
Current price | 120.99 |
ROE | 28.85 % |
ROIC | 23.75 % |
Shareholder Yield | -0.05 % |
5-Yr Total Return | 338.45 % |
1-Yr Total Return | 20.25 % |
Next Earnings Date | 10-16-24 |
Latest Quarter Information
What the CEO said:
The teams delivered a solid performance, achieving second quarter 2024 operating income of $559 million and adjusted EBITDA of $686 million. Given our proven through-cycle cash generation, we also maintained strong liquidity of $2.7 billion, while also investing $419 million in our organic growth projects and distributing $382 million to our shareholders through cash dividends and share repurchases. Across the company, our teams performed well, while keeping each other safe. Underlying steel demand was stable in the second quarter. However, earnings declined sequentially due to lower realized selling values in our steel operations.
What we say:
08-08-2024, Q2 results were marked by steady steel demand and strong liquidity. STLD witnessed lower realized selling values in steel operations, improved earnings from metals recycling, and steady earnings from the steel fabrication business. The company recorded a Q2 operating income of $442M (lower Q/Q) due to lower realized selling values. Q2 shipments were ~3.2M tons. STLD's average external product selling price for steel operations decreased by $63/ ton Q/Q to $1,138 and the average ferrous scrap cost per ton was $29 lower at $388. STLD invested $793M in CAPEX, paid cash dividends of $141M, and repurchased $607M in stocks. STLD expects steel pricing to improve in 2H'24.
Investment Thesis
Dividend Triangle
5-Yr Rev. Growth | 9.70 % |
5-Yr EPS Growth | 22.30 % |
5-Yr Div Growth | 17.80 % |
Potential Risks
Debt/Equity | 0.35 |
Financial Debt to EBITDA (TTM) | 1.00 |
Current Ratio (Quarterly) | 2.90 |
Credit Score | 55 |
Dividend Growth Perspective
Dividend ($) | 1.84 |
Dividend Yield Fwd | 1.55 % |
Dividend Frequency | Quarterly |
Average 5-Yr Yield | 1.80 % |
Payout Ratio (%) | 11.45 |
Cash Payout Ratio (%) | 33.05 |
DGR 1-Yr | 8.25 |
DGR 3-Yr | 19.35 |
DGR 5-Yr | 17.80 |
DGR Streak | 13 |
Chowder Score | 19.30 |
Next DVD PMT | 10-11-24 |
Valuation
(Data for `ddm_recent_annual_dividend` field are missing to build DDM tables)
Video Tutorial: How to Read the Stock Cards DDM Valuation
Market Cap | 18 B |
PE Ratio | 9.60 |
Fwd PE | 11.80 |
Price to Book Ratio | 2.05 |
DDM Valuation | N/A |
Average 5-Yr PE | 8.53 |
Value Score | 64 |
- All financial metrics are updated weekly.
- The DSR PRO rating and Dividend Safety Score are updated quarterly.
- The analysis (investment thesis, risk potential, dividend growth perspective and DDM calculation) is reviewed every 6 months.
- The PDF format includes only comments (no metrics) and is reviewed every 6 months.