Steel Dynamics Inc (STLD, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $132.06, Steel Dynamics Inc has witnessed a daily gain of 0.75%, marked against a three-month change of 16%. A thorough analysis, underlined by the GF Score, suggests that Steel Dynamics Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 8/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 8/10
Steel Dynamics Inc's GF Score of 92 out of 100 signals the highest outperformance potential, with particularly high ranks in financial strength, profitability, and growth, while the GF Value rank is a bit lower.
Understanding Steel Dynamics Inc Business
Steel Dynamics Inc operates scrap-based steel minimills with roughly 16 million tons of annual steel production capacity. The company's segments include steel operations, metals recycling operations, and steel fabrication operations. It generates maximum revenue from the steel operations segment. With a market cap of $21.37 billion and sales of $18.80 billion, Steel Dynamics Inc boasts an operating margin of 18.21%, reflecting its efficiency and profitability.
Financial Strength Breakdown
Steel Dynamics Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Steel Dynamics Inc stands impressively at 44.76, underscoring its strong capability to cover its interest obligations. With an Altman Z-Score of 5.72, Steel Dynamics Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. The favorable Debt-to-Revenue ratio of 0.16 solidifies its financial health.
Profitability Rank Breakdown
Steel Dynamics Inc's Profitability Rank is impressive, with an Operating Margin that has increased to 18.21% in 2023 from 10.18% in 2019. The Gross Margin has also seen a consistent rise over the past five years, reaching 21.53% in 2023. These trends underscore the company's growing proficiency in transforming revenue into profit. Additionally, Steel Dynamics Inc's Predictability Rank of 3.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Steel Dynamics Inc demonstrates a strong commitment to expanding its business, as evidenced by its high Growth Rank. The company's 3-Year Revenue Growth Rate is 35.4%, outperforming 91.41% of companies in the Steel industry. The three-year EBITDA growth rate stands at 61.4, and the rate over the past five years is 36.6, accentuating the company's continued capability to drive growth.
Conclusion: A Strong Investment Case
Considering Steel Dynamics Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking to capitalize on such robust financial health and growth prospects may find Steel Dynamics Inc an attractive addition to their portfolios. For more insights into companies with strong GF Scores, GuruFocus Premium members can explore the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
