Financial Review: Steel Dynamics (STLD) versus The Competition

Steel Dynamics (NASDAQ:STLD) is one of 1,984 public companies in the “Metals & Mining” industry, but how does it contrast to its competitors? We will compare Steel Dynamics to related businesses based on the strength of its analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.

Earnings & Valuation

This table compares Steel Dynamics and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Steel Dynamics	$22.22 billion	$1.19 billion	17.65
Steel Dynamics Competitors	$174.33 billion	$278.26 million	-26.28

Steel Dynamics’ competitors have higher revenue, but lower earnings than Steel Dynamics. Steel Dynamics is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Risk & Volatility

Steel Dynamics has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500. Comparatively, Steel Dynamics’ competitors have a beta of 0.96, meaning that their average share price is 4% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Steel Dynamics and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Steel Dynamics	0	4	9	0	2.69
Steel Dynamics Competitors	6420	22621	32338	1800	2.47

Steel Dynamics currently has a consensus price target of $275.17, indicating a potential upside of 15.05%. As a group, “Metals & Mining” companies have a potential upside of 29.00%. Given Steel Dynamics’ competitors higher probable upside, analysts clearly believe Steel Dynamics has less favorable growth aspects than its competitors.

Profitability

This table compares Steel Dynamics and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Steel Dynamics	8.82%	21.57%	11.61%
Steel Dynamics Competitors	-1,161,736,352,322,426,600.00%	-52.89%	-2.07%

Dividends

Steel Dynamics pays an annual dividend of $2.12 per share and has a dividend yield of 0.9%. Steel Dynamics pays out 15.6% of its earnings in the form of a dividend. As a group, “Metals & Mining” companies pay a dividend yield of 10.4% and pay out 10.8% of their earnings in the form of a dividend. Steel Dynamics has increased its dividend for 13 consecutive years. Steel Dynamics lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Institutional & Insider Ownership

82.4% of Steel Dynamics shares are owned by institutional investors. Comparatively, 16.1% of shares of all “Metals & Mining” companies are owned by institutional investors. 6.6% of Steel Dynamics shares are owned by insiders. Comparatively, 17.6% of shares of all “Metals & Mining” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Steel Dynamics beats its competitors on 9 of the 15 factors compared.

About Steel Dynamics

Steel Dynamics, Inc. is a U.S.-based steel producer and metals recycler founded in 1993. The company operates electric-arc-furnace steel mills and produces flat-rolled, structural, engineered bar, merchant bar and rail products for customers across a range of industries. Its businesses also include metals recycling, steel fabrication and aluminum operations. Through these activities, Steel Dynamics collects and processes scrap metal, manufactures steel components and supplies products used in construction, automotive manufacturing, energy and other markets.