Steel Dynamics Inc (STLD, Financial) has recently captured the attention of investors and financial analysts with its strong financial performance. With a current share price of $123.78, Steel Dynamics Inc has experienced a daily gain of 2.4%, despite a three-month change of -6.92%. A detailed analysis, supported by the GF Score, indicates that Steel Dynamics Inc is poised for significant growth in the foreseeable future.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system developed by GuruFocus. It evaluates stocks based on five key aspects of valuation, which have shown a strong correlation with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield higher returns. The GF Score ranges from 0 to 100, with 100 representing the highest potential for outperformance. For Steel Dynamics Inc, the GF Score is an impressive 93 out of 100, indicating a strong potential for market outperformance.
- Financial strength rank: 8/10
- Profitability rank: 9/10
- Growth rank: 9/10
- GF Value rank: 5/10
- Momentum rank: 8/10
Understanding Steel Dynamics Inc Business
Steel Dynamics Inc operates scrap-based steel minimills and boasts approximately 16 million tons of annual steel production capacity. The company's segments include steel operations, metals recycling operations, steel fabrication operations, and Aluminum Operations Segment, among others. With a market cap of $19.1 billion and sales of $18.15 billion, Steel Dynamics Inc generates the majority of its revenue from the steel operations segment. The company's operating margin stands at 15.34%, reflecting efficient management and strong profitability.
Financial Strength Breakdown
Steel Dynamics Inc's robust balance sheet demonstrates resilience against financial volatility, indicative of prudent capital management. The company's Interest Coverage ratio is an impressive 48.08, significantly higher than the minimum ratio of 5 preferred by legendary investor Benjamin Graham. Additionally, with an Altman Z-Score of 5.3, Steel Dynamics Inc shows strong defense against financial distress. The Debt-to-Revenue ratio of 0.17 further solidifies its financial health.
Profitability and Growth Metrics
Steel Dynamics Inc's Profitability Rank is outstanding, reflecting its superior ability to generate profits relative to its peers. The company's Operating Margin has seen a significant increase over the past five years, demonstrating enhanced efficiency in revenue management. Furthermore, Steel Dynamics Inc's Growth Rank is also high, with a 3-Year Revenue Growth Rate of 35.4%, outperforming 90.68% of competitors in the Steel industry. This is complemented by a strong increase in EBITDA over the past few years, highlighting the company's ongoing growth capabilities.
Conclusion
Considering Steel Dynamics Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score underscores the company's exceptional position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using 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.
