Steel Dynamics, Inc. (STLD) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Nucor Corp.

Steel Dynamics, Inc.

Commercial Metals Co.

Metallus, Inc.

Mesabi Trust

Reliance, Inc.

Worthington Enterprises, Inc.

Radius Recycling, Inc.

Cleveland-Cliffs, Inc.

Ryerson Holding Corp.

United States Steel Corp.

Why is Steel Dynamics, Inc. ?

High Management Efficiency with a high ROCE of 33.62%

Strong ability to service debt as the company has a low Debt to EBITDA ratio of 0.72 times

Healthy long term growth as Net Sales has grown by an annual rate of 12.38% and Operating profit at 9.12%

The company has declared Negative results for the last 4 consecutive quarters

NET PROFIT(HY) At USD 515.88 MM has Grown at -49.03%
OPERATING CASH FLOW(Y) Lowest at USD 1,560.93 MM
ROCE(HY) Lowest at 11.57%

With ROCE of 12.42%, it has a fair valuation with a 2.69 Enterprise value to Capital Employed

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 13.29%, its profits have fallen by -50.8%

High Institutional Holdings at 83.96%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Steel Dynamics, Inc. should be less than 10%
Overall Portfolio exposure to Ferrous Metals should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Ferrous Metals)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Steel Dynamics, Inc. for you?

Medium Risk, High Return

Absolute

Risk Adjusted

Volatility

Steel Dynamics, Inc.

17.4%

0.88

37.44%

S&P 500

13.22%

0.61

20.17%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

12.38%

EBIT Growth (5y)

9.12%

EBIT to Interest (avg)

44.89

Debt to EBITDA (avg)

0.72

Net Debt to Equity (avg)

0.34

Sales to Capital Employed (avg)

1.54

Tax Ratio

21.21%

Dividend Payout Ratio

18.69%

Pledged Shares

Institutional Holding

83.96%

ROCE (avg)

33.62%

ROE (avg)

31.13%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

3.26

EV to EBIT

21.64

EV to EBITDA

16.16

EV to Capital Employed

2.69

EV to Sales

1.84

PEG Ratio

Dividend Yield

2.21%

ROCE (Latest)

12.42%

ROE (Latest)

13.37%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bollinger Bands

Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Mildly Bearish

Dow Theory

Bullish

OBV

Mildly Bearish

No Trend

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

3What is working for the Company

DIVIDEND PER SHARE(HY)

Highest at USD 9.87

DIVIDEND PAYOUT RATIO(Y)

Highest at 24.93%

-21What is not working for the Company

NET PROFIT(HY)

At USD 515.88 MM has Grown at -49.03%

OPERATING CASH FLOW(Y)

Lowest at USD 1,560.93 MM

ROCE(HY)

Lowest at 11.57%

DEBT-EQUITY RATIO (HY)

Highest at 37.04 %

RAW MATERIAL COST(Y)

Grown by 20.31% (YoY

CASH AND EQV(HY)

Lowest at USD 1,704.18 MM

INVENTORY TURNOVER RATIO(HY)

Lowest at 4.75 times

INTEREST(Q)

Highest at USD 17.38 MM

Here's what is working for Steel Dynamics, Inc.

Dividend per share

Highest at USD 9.87 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (USD)

Dividend Payout Ratio

Highest at 24.93%

in the last five years

MOJO Watch

Company is distributing higher proportion of profits generated as dividend

DPR (%)

Here's what is not working for Steel Dynamics, Inc.

Net Profit

At USD 515.88 MM has Grown at -49.03%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is very negative

Net Profit (USD MM)

Operating Cash Flow

Lowest at USD 1,560.93 MM and Fallen

In each year in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (USD MM)

Interest

At USD 17.38 MM has Grown at 43.28%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Debt-Equity Ratio

Highest at 37.04 % and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio

Interest

Highest at USD 17.38 MM

in the last five periods and Increased by 43.28% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (USD MM)

Cash and Eqv

Lowest at USD 1,704.18 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Inventory Turnover Ratio

Lowest at 4.75 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling inventory has slowed

Inventory Turnover Ratio

Raw Material Cost

Grown by 20.31% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales