10Y annualized return is
excellent
at 19.5% per year
STLD has met or exceeded earnings expectations in
the majority of
recent quarters (8/10)
Attractive PE Ratio
Low Price-to-Sales Ratio
Strong Return on Equity
Healthy Operating Profit Margin
Strong Liquidity Ratios
Low Debt Levels
🏆 Strong Financial Metrics
🛡️ Safety Achievements
🔗 Diversified Business Model
🚀 Growth in Aluminum Operations
📈 Positive Market Outlook
High Price-to-Free Cash Flow Ratio
Negative Free Cash Flow
Low Cash Ratio
⚠️ Operational Challenges at Sinton
🔍 Trade Case Uncertainties
🌧️ Macro Challenges
Overall, Steel Dynamics exhibits strong business quality with robust financial metrics and a diversified business model. However, operational challenges at Sinton and uncertainties related to macroeconomic factors could pose risks. The future prospects are promising, particularly with growth in aluminum operations and favorable market conditions, despite potential trade-related uncertainties.
Analysis Date: January 23, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Steel Dynamics, Inc. is a company that makes and recycles steel in the United States. They produce various steel products, like beams and bars, which are used in building construction, cars, and machinery. They also buy scrap metal, clean it up, and sell it to be reused. Additionally, they create steel parts for large buildings. Overall, they help provide essential materials for many industries.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Latest News
The automotive demand recovery, strength in non-residential construction and a rebound in steel prices should enable the Zacks Steel Producers industr...
Beyond analysts' top -and-bottom-line estimates for Steel Dynamics (STLD), evaluate projections for some of its key metrics to gain a better insight i...
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$389.09
Current Market Price: $107.63
IV/P Ratio: 3.62x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
72.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for STLD
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (10.81)
P/B ratio ≤ 1.5 (1.86)
Current ratio ≥ 2.0 (2.53x)
Long-term debt < Net current assets (0.85x)
Margin of safety (72.0%)
STLD does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
13.01%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
15.89%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
8.76%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
A return on equity (ROE) of 16.98% suggests that the company efficiently uses its equity to generate profits, which is a positive indicator for investors.
The operating profit margin of 11.08% indicates that the company retains a healthy portion of revenue as profit, showcasing effective cost management.
The negative free cash flow per share of -0.15 suggests that the company is currently not generating positive cash flow after accounting for capital expenditures, which can be a concern for sustainability.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.35x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
2.53x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
The current ratio of 2.53 and quick ratio of 1.08 indicate that the company has strong liquidity and can easily cover its short-term liabilities.
The debt-to-equity ratio of 0.36 and debt-to-assets ratio of 0.22 indicate that the company maintains a conservative approach to debt, reducing financial risk.
The cash ratio of 0.27 suggests that while the company has good liquidity overall, it may not have sufficient cash readily available to cover short-term obligations.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Steel Dynamics reported best-in-class financial metrics including cash from operations of $1.8 billion and adjusted EBITDA of $2.5 billion. This demonstrates robust operational efficiency and strong cash flow generation capabilities.
The company celebrated its safest year ever, with record low injury and lost time rates, highlighting a strong safety culture that is critical for sustainable operations.
Steel Dynamics has successfully diversified its operations with new value-added flat rolled steel coating lines and an aluminum segment, which enhances its competitive advantage and product offering.
Despite significant progress in ramping up production, Sinton's profitability has not yet materialized due to high operational costs and ongoing quality issues during the startup phase.
The company is poised for growth in the aluminum segment, with expectations to achieve EBITDA positivity by the second half of 2025 and significant production ramp-up in subsequent years, tapping into a market with clear supply deficits.
Steel Dynamics anticipates increased demand driven by infrastructure spending, onshoring initiatives, and a recovering construction market, suggesting strong growth prospects moving into 2025.
Pending trade cases and potential tariffs could introduce volatility in pricing and imports, impacting competitive positioning in the market.
The company faces potential headwinds from macroeconomic factors including cautious consumer sentiment and fluctuating commodity prices, which could affect overall steel demand.