As the overall business environment continues to increase during this new year, it's almost intuitive that the steel industry will benefit from a better economy. It's also intuitive that as the oil and oil services industries contract the requirement for tubular steel will contract too. But steel is everywhere and isn't going anywhere anytime soon.
It's also true that the steel industry of fifty years ago is not the steel industry of today because the world of fifty years ago isn't the world of today either. The steel industry today competes internationally and is dominated by steel companies in other countries around the globe. As a result, I decided to take a look at today's American steel and iron companies and see what I could find out.
It's also true that the steel industry of fifty years ago is not the steel industry of today because the world of fifty years ago isn't the world of today either. The steel industry today competes internationally and is dominated by steel companies in other countries around the globe. As a result, I decided to take a look at today's American steel and iron companies and see what I could find out.
With this in mind, and the fact that Nucor Corporation keeps showing up on my best ideas list, I thought it was time to take a look at the big names in the American steel industry. Listed below are six of the largest (by market capitalization) steel and iron companies headquartered in the United States. This group may or may not contain one or two real gems that an investor may feel fits in with their own investing style. Of course additional research will probably be needed before making any investments, but this may be just the initial analysis needed to start that research.
Before digging into the company fundamentals below, it may be advantageous to watch the following video which explains the steel making processes and what's required to turn iron ore into rolled or slab steel. It's a very interesting summary of just how the processes work. As you will see, the steel industry is a very sophisticated and competitive industry and often the winner is the one that adds the most value for their customers.
Nucor Corporation (NUE), together with its subsidiaries, manufactures and sells steel and steel products in North America and internationally. It operates through three segments: Steel Mills, Steel Products, and Raw Materials. The Steel Mills segment produces and distributes hot-rolled, cold-rolled, and galvanized sheet steel; plate steel; structural steel comprising wide-flange beams, beam blanks, H-piling, and sheet piling; and bar steel, such as blooms, billets, concrete reinforcing bars, merchant bars, and special bar quality products. This segment sells its products to service centers, fabricators, and manufacturers. It serves automotive, energy, agricultural, heavy equipment, and transportation sectors. The Steel Products segment offers steel joists and joist girders, steel decks, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, metal building systems, steel grating and expanded metal, and wire and wire mesh. Its products are used by contractors in constructing highways, bridges, reservoirs, utilities, hospitals, schools, airports, stadiums, and high-rise buildings. This segment sells its products to general contractors, fabricators, distributors, and manufacturers. The Raw Materials segment produces direct reduced iron; brokers ferrous and nonferrous metals, pig iron, hot briquetted iron, and direct reduced iron; supplies ferro-alloys; and processes ferrous and nonferrous scrap metal. This segment sells its products to electric arc furnace steel mills and foundries that use ferrous scrap as a raw material in their manufacturing process; and aluminum can producers, secondary aluminum smelters, steel mills, and other processors and consumers of various nonferrous metals. Nucor Corporation was founded in 1940 and is based in Charlotte, North Carolina. (Daily Chart)
| 11 January 2015 Price $47.78 1yr Target $59.06 Analysts 17 1yr Cap Gain 23.60% Dividend $1.49 Yield 3.11% 1yr Est Tot Return 26.71% 3yr DivGR 0.67% 5yr DivGR 0.97% P/E 22.75 PEG 0.57 | Market Cap $15.24 Bil Beta 1.29 EPS (ttm) $2.10 Payout Ratio 70.95% EPS next yr $3.43 Forward P/E 13.94 Debt/Equity 0.59 ROA 4.40% ROE 8.80% ROI 6.00% Sales $21.00 Bil Income $671.80 Mil Profit Margin 3.19% |
Reliance Steel & Aluminum Co. (RS) operates as a metals service center company. The company provides metals processing services and distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products to small machine shops and fabricators, and OEM customers. Its principal processing services comprise cutting, leveling, sawing, machining, or electro polishing. The company also offers a range of metal perforating and fabrication services; and steel and alloy pipes, tubes and bar products, and precision manufacturing of various tools designed for the energy service companies. Reliance Steel & Aluminum Co. serves general manufacturing, non-residential construction, transportation, aerospace, energy, electronics, and semiconductor fabrication and related industries. As of February 20, 2014, it maintained a network of approximately 290 metals service center processing and distribution facilities in 39 states in the United States, as well as in Australia, Belgium, Canada, China, Malaysia, Mexico, Singapore, South Korea, the United Arab Emirates, and the United Kingdom. The company was founded in 1939 and is headquartered in Los Angeles, California. (Daily Chart)
| 11 January 2015 Price $57.09 1yr Target $74.60 Analysts 10 1yr Cap Gain 30.67% Dividend $1.40 Yield 2.45% 1yr Est Tot Return 33.12% 3yr DivGR 42.36% 5yr DivGR 28.47 P/E 13.15 PEG 1.38 | Market Cap $4.46 Bil Beta 1.71 EPS (ttm) $4.34 Payout Ratio 32.25% EPS next yr $5.80 Forward P/E 9.84 Debt/Equity 0.57 ROA 4.40% ROE 8.50% ROI 6.70% Sales $10.18 Bil Income $341.00 Mil Profit Margin 3.34% |
Steel Dynamics, Inc. (STLD), together with its subsidiaries, manufactures and sells steel products, processes and sells recycled ferrous and nonferrous metals, and fabricates and sells steel joist and decking products in the United States and internationally. The company operates in three segments: Steel Operations, Metals Recycling and Ferrous Resources Operations, and Steel Fabrication Operations. The Steel Operations segment provides a range of sheet steel products, including hot rolled, cold rolled, and coated steel products; structural steel beams, pilings, and various rail products for the railroad industry; rounds and round-cornered squares; angles, plain rounds, flats, and channels, as well as billets; and merchant beams and specialty structural steel sections. This segment offers its products for automotive, agriculture, construction, commercial, transportation, energy, and industrial machinery markets. The Metals Recycling and Ferrous Resources Operations segment is involved in the purchase, process, and resale of ferrous and nonferrous scrap metals into reusable forms and grades. Its ferrous products include heavy melting steel, busheling, bundled scrap, shredded scrap, steel turnings, and cast iron products; and nonferrous products comprise aluminum, brass, copper, stainless steel, and other nonferrous metals for use in foundry, mill refining, and smelting applications. This segment also produces liquid pig iron and hot briquetted iron; and iron nugget products. The Steel Fabrication Operations segment produces steel building components comprising trusses, girders, steel joists, and steel decking products for the non-residential construction industry. The company also serves steel service centers, steel fabricators, various manufacturers, cold finishers, forgers, intermediate processors, original equipment manufacturers, steel service centers, and distributors. The company was founded in 1993 and is headquartered in Fort Wayne, Indiana. (Daily Chart)
| 11 January 2015 Price $18.90 1yr Target $26.73 Analysts 15 1yr Cap Gain 41.42% Dividend $0.46 Yield 2.43% 1yr Est Tot Return 43.85% 3yr DivGR 4.72% 5yr DivGR 7.52 P/E 17.66 PEG 0.62 | Market Cap $4.54 Bil Beta 1.64 EPS (ttm) $1.07 Payout Ratio 42.99% EPS next yr $2.10 Forward P/E 8.99 Debt/Equity 1.03 ROA 4.00% ROE 9.30% ROI 6.20% Sales $8.10 Bil Income $256.70 Mil Profit Margin 3.16% |
United States Steel Corporation (X) produces and sells flat-rolled and tubular steel products in North America and Europe. The company operates in three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE), and Tubular Products (Tubular). The Flat-Rolled segment offers slabs, rounds, strip mill plates, sheets, and tin mill products, as well as produces iron ore and coke. This segment serves customers in the service center, conversion, transportation, construction, container, appliance, and electrical markets. The USSE segment provides slabs, sheets, strip mill plates, tin mill products, and spiral welded pipes, as well as heating radiators and refractory ceramic materials. This segment serves customers in the construction, service center, conversion, container, transportation, appliance and electrical, oil, gas, and petrochemical markets. The Tubular segment offers seamless and electric resistance welded steel casing and tubing; and standard and line pipe and mechanical tubing products. This segment serves customers in the oil, gas, and petrochemical markets. The company also provides railroad services; and owns, develops, and manages various real estate assets. The company was founded in 1901 and is headquartered in Pittsburgh, Pennsylvania. (Daily Chart)
| 11 January 2015 Price $24.57 1yr Target $42.63 Analysts 16 1yr Cap Gain 73.50% Dividend $0.20 Yield 0.81% 1yr Est Tot Return 74.31% 3yr DivGR 0.00% 5yr DivGR 2.12% P/E 37.80 PEG 5.82 | Market Cap $3.57 Bil Beta 1.76 EPS (ttm) $0.65 Payout Ratio 30.76% EPS next yr $3.50 Forward P/E 7.02 Debt/Equity 0.89 ROA 0.70% ROE 2.70% ROI -18.40% Sales $17.70 Bil Income $97.00 Mil Profit Margin 0.54% |
Worthington Industries, Inc. (WOR), a metals manufacturing company, focuses on value-added steel processing and manufactured metal products in the United States, Europe, Mexico, Canada, and internationally. It operates through three segments: Steel Processing, Pressure Cylinders, and Engineered Cabs. The Steel Processing segment provides stainless and flat-rolled steel processing services to customers in the automotive, construction, lawn and garden, hardware, furniture, office equipment, leisure and recreation, appliance, agricultural, HVAC, container, and aerospace markets. It also toll processes steel for steel mills, large end-users, service centers, and other processors; and designs and manufactures reusable custom steel platforms, racks, and pallets for supporting, protecting, and handling products in the shipping process for customers in industries, such as automotive, lawn and garden, and recreational vehicles. The Pressure Cylinders segment manufactures and sells high-pressure and seamless steel cylinders for compressed natural gas, and other industrial gas storage applications; and filled and unfilled pressure cylinders, tanks, and various accessories and related products for various end-use market applications comprising consumer products, alternative fuels, industrial products, and energy. The Engineered Cabs segment designs and manufactures custom-engineered open and closed cabs, and operator stations for heavy mobile equipment in a range of industries; and manufactures other specialty weldments, kits, accessories, and cab components primarily to original equipment manufacturers. The company was founded in 1955 and is headquartered in Columbus, Ohio. (Daily Chart)
| 11 January 2015 Price $26.25 1yr Target $41.67 Analysts 6 1yr Cap Gain 58.74% Dividend $0.72 Yield 2.74% 1yr Est Tot Return 61.48% 3yr DivGR 16.00% 5yr DivGR 7.98% P/E 12.56 PEG 1.05 | Market Cap $1.76 Bil Beta 1.79 EPS (ttm) $2.09 Payout Ratio 34.44% EPS next yr $2.92 Forward P/E 8.98 Debt/Equity 0.79 ROA 6.50% ROE 17.10% ROI 5.20% Sales $3.40 Bil Income $147.40 Mil Profit Margin 4.32% |
Commercial Metals Company (CMC) manufactures, recycles, and markets steel and metal products, and related materials and services in the United States and internationally. It operates through five segments: Americas Recycling, Americas Mills, Americas Fabrication, International Mill, and International Marketing and Distribution. The Americas Recycling segment processes scrap metals for use as a raw material by manufacturers of new metal products through 29 scrap metal processing facilities to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers. The Americas Mills segment operates 5 steel mills producing reinforcing bars, angles, flats, rounds, small beams, fence-post sections, and other shapes; 2 scrap metal shredders and 10 scrap metal processing facilities; and a railroad salvage company. The Americas Fabrication segment operates fence post manufacturing plants, construction-related product facilities, and plants that bend, weld, cut, and fabricate steel; warehouses that sell or rent products for the installation of concrete; facilities that produce steel fence posts; and facilities that heat-treat steel. The International Mill segment engages in mill, recycling, and fabrication operations through the operation of two rolling minimills that produce reinforcing bar (rebar) and merchant products; a specialty rod finishing mill; scrap processing facilities; and four steel fabrication facilities for rebar and mesh products. The International Marketing and Distribution segment processes, sells, and distributes steel products, ferrous and nonferrous metals, and other industrial products to manufacturers in the steel, nonferrous metals, metal fabrication, chemical, refractory, construction, and transportation businesses. The company was founded in 1915 and is headquartered in Irving, Texas. (Daily Chart)
| 11 January 2015 Price $14.21 1yr Target $20.00 Analysts 8 1yr Cap Gain 40.74% Dividend $0.48 Yield 3.37% 1yr Est Tot Return 44.11% 3yr DivGR 0.00% 5yr DivGR 0.00% P/E 16.52 PEG 1.16 | Market Cap $1.67 Bil Beta 1.49 EPS (ttm) $0.86 Payout Ratio 55.81% EPS next yr $1.56 Forward P/E 9.11 Debt/Equity 0.96 ROA 3.20% ROE 8.60% ROI 6.70% Sales $7.04 Bil Income $102.10 Mil Profit Margin 1.44% |
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