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 $124.3, Steel Dynamics Inc has witnessed a daily loss of 0.3%, marked against a three-month change of 0.61%. 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: 9/10
- GF Value rank: 5/10
- Momentum rank: 7/10
Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. GuruFocus assigned Steel Dynamics Inc a GF Score of 92 out of 100, which signals the highest outperformance potential.
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, steel fabrication operations, and Aluminum Operations Segment, among others. It generates maximum revenue from the steel operations segment. With a market cap of $19.18 billion and sales of $18.15 billion, coupled with an operating margin of 15.34%, Steel Dynamics Inc showcases significant industry presence and financial robustness.
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 stands impressively at 48.08, underscoring its strong capability to cover its interest obligations. With an Altman Z-Score of 5.36, Steel Dynamics Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. The favorable Debt-to-Revenue ratio of 0.17 solidifies its financial health.
Profitability and Growth Metrics
Steel Dynamics Inc's Profitability Rank is impressive, with an Operating Margin that has increased significantly over the past five years. The company's Gross Margin has also seen a consistent rise, underscoring growing proficiency in transforming revenue into profit. Furthermore, its Predictability Rank of 3.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Conclusion
Considering Steel Dynamics Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors looking for robust investment opportunities may find Steel Dynamics Inc an attractive option.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: 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.
