Steel Dynamics Inc. (STLD): What is the Risk Factor?

Steel Dynamics Inc. (NASDAQ:STLD) saw an upside of 2.76% to close Monday at $60.72 after adding $1.63 on the day. The 5-day average trading volume is 1,716,620 shares of the company’s common stock. It has gained $62.26 in the past week. An average of 2,262,805 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 2,048,250.

STLD’s 1-month performance is -7.72% or -$5.08 on its low of $55.87 reached on 09/21/21. The company’s shares have touched a 52-week low of $30.26 and high of $74.37, with the stock’s rally to the 52-week high happening on 08/13/21. YTD, STLD has achieved 64.69% or $23.85. However, the current price is down -18.35%% from the 52-week high price.


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Insider Transactions

On Sep 09, 33 days have gone by since the last insider trading activity for Steel Dynamics Inc. (STLD). MILLETT MARK D (Chairman, President and CEO) most recently sold 67,686 shares at $66.34 per share on Sep 09. This transaction cost the insider $4,490,289. Chairman, President and CEO, MILLETT MARK D, sold 176,751 shares at a price of $67.08 on Sep 03. Then, on Aug 30, President and CEO MILLETT MARK D sold 155,563 shares at a price of $70.99 per share. This transaction amounted to $11,043,110.

Valuation Metrics

The company’s PE ratio for the last five years has touched a high of 88.70 and a low of 4.745. STLD stock has a beta of 1.52. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 0.96 while the price-to-book (PB) in the most recent quarter is 2.54.

Steel Dynamics Inc. pays an annual dividend of $1.04 per share. Its dividend yield is 1.71% and the payout ratio is 15.10%. STLD paid $0.26 a share compared with prior rate of $0.26, down 0.0% from last year’s. The company has boosted its dividend for the last 1 consecutive years with the latest dividend increase of $0.01 reported on Friday February 26 2021. Measured over the last 3 years, the Dividend has been growing by 61.29% yearly.

It is projected that Steel Dynamics Inc.’s next ex-dividend date will be on 30-Dec. STLD is expected to distribute $0.26 as its next dividend.

Steel Dynamics Inc.’s quick ratio for the period ended June 29 was 1.50, with the current ratio over the same period at 2.80 meaning that STLD stock is able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 0.60, while the total debt to equity was 0.62. In terms of profitability, the gross margin trailing 12 months is 21.10%. The trailing 12-month EBITDA margin is 12.63% while for the period ending June 29; Steel Dynamics Inc.’s operating margin was 15.20%. The firm’s gross profit as reported stood at $1.43 billion against revenue of $9.6 billion.

Earnings Surprise

For the quarterly period ending June 29 this year, Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 42.33% to $4.47 billion, while revenue of $3.54 billion was 20.62% off the previous quarter. Analysts expected STLD to announce $3.42 per share in earnings in its latest quarter, but it posted $3.4, representing a -0.60% surprise. EBITDA for the quarter stood at more than $1.04 billion. STLD stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 5.83 billion, with total debt at $3.11 billion. Shareholders hold equity totaling $204.11 million

Technical Picture

Let’s look briefly at Steel Dynamics Inc. (STLD) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 11 October was 52.58% to suggest the stock is trending Neutral, with historical volatility in this time period at 36.37%.

The stock’s 5-day moving average is $59.23, reflecting a +3.78% or $2.21 change from its current price. STLD is currently trading -4.93% above its 20-day SMA, -2.40% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by -5.79% and +66.95% respectively.

Stochastic %K and %D was 54.85% and 44.17% and the average true range (ATR) pointed at 2.41. The RSI (14) points at 48.24%, while the 14-day stochastic is at 66.72% with the period’s ATR at 2.44. The stock’s 9-day MACD Oscillator is pointing at 0.75 and 0.34 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Steel Dynamics Inc. (NASDAQ: STLD), Seaport Global Securities launched coverage with a Buy rating. Analysts offering their rating for STLD stock have a consensus rating for the stock as Overweight. Currently, 0 brokerage advisors rate STLD as a “sell,”, while 3 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 1 rates the stock as overweight while 9 have offered a “buy” rating.

What is STLD’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $65.00 and a high of $104.00, with their median price target at $75.00. Looking at these predictions, the average price target given by analysts is for Steel Dynamics Inc. (STLD) stock is $79.73.

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