Steel Dynamics Inc (STLD, Financial) has recently captured the attention of investors and financial analysts, thanks to its solid financial performance. With its shares currently priced at $126 and a modest daily gain of 0.38%, the company has experienced a slight dip of -2.47% over the past three months. However, a detailed analysis based on the GF Score indicates that Steel Dynamics Inc is poised for significant growth, making it a compelling candidate for potential investors.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, assessing stocks based on five key aspects: financial strength, profitability, growth, GF Value, and momentum. These components are crucial as they have shown a strong correlation with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield better returns. For Steel Dynamics Inc, the GF Score is an impressive 92 out of 100, indicating a high potential for outperformance.
- Financial strength rank: 8/10
- Profitability rank: 9/10
- Growth rank: 9/10
- GF Value rank: 5/10
- Momentum rank: 7/10
Understanding Steel Dynamics Inc Business
Steel Dynamics Inc operates primarily in the steel production industry, utilizing scrap-based steel minimills. With an impressive annual steel production capacity of approximately 16 million tons, the company's operations span steel, metals recycling, steel fabrication, and aluminum. Steel Dynamics Inc, with a market cap of $19.44 billion and sales of $18.15 billion, boasts an operating margin of 15.34%, primarily driven by its steel operations segment.
Financial Strength Breakdown
Steel Dynamics Inc showcases a robust balance sheet, evidenced by an Interest Coverage ratio of 48.08 and an Altman Z-Score of 5.38, indicating strong financial health and low risk of distress. The company's strategic debt management is reflected in its favorable Debt-to-Revenue ratio of 0.17.
Profitability and Growth Metrics
Steel Dynamics Inc's profitability is highlighted by its increasing Operating Margin and Gross Margin over the past five years. The company's growth is equally impressive, with a 3-Year Revenue Growth Rate of 35.4%, significantly outperforming industry peers. This is complemented by strong EBITDA growth, further underscoring its expansion capabilities.
Conclusion
Considering Steel Dynamics Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's strong position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores through 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.
