Do You Think It Is A Good Idea To Invest In Steel Dynamics Inc. (STLD)?

The stock of Steel Dynamics Inc. (NASDAQ:STLD) increased by increased by $0.43 on Friday to finish at $63.50, up 0.68 percent. The last five days have seen an average of 2,750,060 shares of common stock traded. 36 times new highs were reached in the current year, with a gain of $26.63. The average number of shares traded over the last 20 days was 1,979,700, while the average volume over the last 50 days totaled 2,054,610.

STLD stock appreciated 7.32% since last month. On 10/01/21, the company’s shares reached a one-month low of $56.53. The stock touched a high of $74.37 on 08/13/21, after rallying from a low of $30.26 in 52 weeks. The price of STLD stock has risen by 72.23% or $26.63 this year, reaching a new high 36 times. Still, the stock price is down -14.62% from the 52-week high.


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Insider Transactions

There have been 46 days since Steel Dynamics Inc. (STLD) last reported insider trading activity on Sep 09. On Sep 09, Chairman, President and CEO MILLETT MARK D sold 67,686 shares at $66.34 each. This transaction resulted in the insider making $4,490,289. On Sep 03, MILLETT MARK D sold 176,751 shares at a price of US$67.08. After the transaction, the insider now owns 2,995,573 shares. President and CEO MILLETT MARK D had earlier sold 155,563 shares on Aug 30 for $70.99 a share. The transaction was completed for $11,043,110.

Valuation Metrics

Steel Dynamics Inc. (STLD) has a trailing price-to-earnings (P/E) ratio of 5.73. This level actually compares favorably with the industry at large, as the PE for the Steel industry stands at about 5.88. Further, its PE also compares favorably with the Basic Materials sector’s trailing 12 months PE ratio, which comes in at 13.81 right now. The PE ratio of Steel Dynamics Inc. has varied between 88.70 and 4.745 in the last five years. Beta for the stock is 1.52. There are also a few other valuation ratios worth considering, including the trailing price-to-sales (P/S) ratio of 0.82, the price-to-book (PB) ratio of 2.65.

Steel Dynamics Inc.’s dividend is $1.04 per share per year. With a dividend yield of 1.64%, STLD has a payout ratio of 26.80%. On Oct. 15, the company paid $0.26 per share in dividends, remained unchanged from $0.26 last year. A $0.01 dividend increase was reported on Friday February 26 2021, making it the 9 consecutive year the dividend has increased. Over the last three years, dividends have increased by 61.29%.

For the three months ended June 29, Steel Dynamics Inc.’s quick ratio was 1.50, while its current ratio was 2.80, indicating its ability to pay off its debt. The company’s long-term debt to equity ratio for the quarter ending June 29 is 0.60, and the total debt to equity ratio is 0.62. As far as profitability goes, gross margin for the trailing twelve months is 25.80% percent. Steel Dynamics Inc.’s EBITDA margin for the year ended June 29 was 12.63%, whereas its operating margin stood at 7.40% for the same period. Based on annual data, it had gross profit of $1.43 billion and revenue of $9.6 billion.

Investors will also look at the performance of the company’s management in order to determine the potential profitability of their investment. STLD’s return on assets (ROA) during the last 12 months has been 8.20%. There was a 9.60% return on investment (ROI) in the past year. In the meantime, the return on equity (ROE) for the last 12 months was 17.40%. ROE has averaged 24.01 in the past year for the broader industry.

Earnings Surprise

According to Steel Dynamics Inc.’s quarterly financial report for the quarter that ended June 29. A higher net income was reported in the quarter under review than the previous quarter. Net income for the quarter came in at $4.47 billion, while revenues rose by 42.33% to $3.54 billion. It was predicted that Steel Dynamics Inc.’s quarterly earnings would be $3.4, but it ended up being $3.42, beating the consensus by -0.60%. EBITDA was $1.04 billion for the quarter. At the end of Steel Dynamics Inc.’s most recent quarter ended June 29, its liabilities totaled 5.83 billion, while its total debt was $3.11 billion. Equity owned by shareholders amounts to $204.11 million.

Technical Picture

Here’s a quick look at Steel Dynamics Inc.’s (STLD) price momentum from a technical perspective. As of 22 October, the RSI 9-day stood at 59.21%, suggesting the stock is Neutral, with a 24.44% historical volatility rate.

The stochastic %K and %D were 74.74% and 80.75% respectively, while the average true range (ATR) was 2.53. Based on the 14-day stochastic reading of 70.43%, the RSI (14) reading is 55.34%. On the 9-day MACD Oscillator, the stock is at 1.24, and the 14-day reading is at 2.45.

Analyst Ratings

Steel Dynamics Inc. (NASDAQ: STLD) was downgraded by Morgan Stanley to a an Equal-weight rating in its latest research report. The stock was previously rated as a an Overweight. Analysts have assigned Steel Dynamics Inc. (STLD) an Overweight rating. STLD is a stock that is recommended for selling by 0 brokerage firms, while 3 companies recommend holding. The stock is underweighted by 0 analysts. Among the analysts who rate the stock, 1 rate it overweight and 9 others recommend it as a buy.

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

The current consensus forecast for the stock is between $66.50 and $104.00, with a median target price of $75.00. In analyzing these forecasts, the average price target given by analysts for Steel Dynamics Inc. (STLD) is $81.41.

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