Zacks Investment Research cut shares of Steel Dynamics (NASDAQ:STLD) from a buy rating to a hold rating in a research note issued to investors on Thursday morning.
According to Zacks, “Steel Dynamics has outperformed the industry over a year. The company should gain from strong demand across automotive and construction markets. The Heartland acquisition has also boosted its shipping capacity and portfolio of value-added products. The company should also benefit from its efforts to expand capacity and upgrade facilities. It also remains committed to deliver value to shareholders leveraging strong cash flows. However, Steel Dynamics is exposed to raw material cost inflation, which is hurting margins in its fabrication unit. The U.S. steel industry also remains affected by continued influx of cheaper imports.”
A number of other equities research analysts have also recently issued reports on STLD. BidaskClub cut shares of Steel Dynamics from a strong-buy rating to a buy rating in a research note on Wednesday, June 13th. ValuEngine cut shares of Steel Dynamics from a buy rating to a hold rating in a research note on Saturday, June 16th. Jefferies Financial Group reissued a buy rating and issued a $58.00 price target on shares of Steel Dynamics in a research note on Wednesday, July 25th. Bank of America lifted their price target on shares of Steel Dynamics from $54.00 to $56.00 and gave the company a buy rating in a research note on Wednesday, July 25th. Finally, Morgan Stanley raised shares of Steel Dynamics from an equal weight rating to an overweight rating and lifted their price target for the company from $50.00 to $52.00 in a research note on Monday, August 27th. Four equities research analysts have rated the stock with a hold rating and eleven have issued a buy rating to the company. The company presently has a consensus rating of Buy and an average target price of $54.08.
Steel Dynamics (NASDAQ:STLD) last released its quarterly earnings results on Monday, July 23rd. The basic materials company reported $1.53 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.49 by $0.04. Steel Dynamics had a net margin of 10.01% and a return on equity of 26.90%. The firm had revenue of $3.09 billion for the quarter, compared to analysts’ expectations of $2.91 billion. During the same quarter last year, the company earned $0.63 EPS. The firm’s revenue for the quarter was up 29.3% compared to the same quarter last year. As a group, analysts forecast that Steel Dynamics will post 5.55 EPS for the current year.
Steel Dynamics announced that its Board of Directors has initiated a stock repurchase program on Tuesday, September 4th that allows the company to buyback $750.00 million in outstanding shares. This buyback authorization allows the basic materials company to reacquire up to 6.8% of its shares through open market purchases. Shares buyback programs are generally an indication that the company’s leadership believes its stock is undervalued.
The firm also recently announced a quarterly dividend, which will be paid on Friday, October 12th. Shareholders of record on Sunday, September 30th will be paid a dividend of $0.1875 per share. The ex-dividend date of this dividend is Thursday, September 27th. This represents a $0.75 annualized dividend and a yield of 1.65%. Steel Dynamics’s dividend payout ratio (DPR) is presently 28.30%.
In other Steel Dynamics news, insider Christopher A. Graham sold 10,800 shares of Steel Dynamics stock in a transaction on Wednesday, September 19th. The shares were sold at an average price of $47.61, for a total transaction of $514,188.00. Following the sale, the insider now owns 26,087 shares of the company’s stock, valued at approximately $1,242,002.07. The sale was disclosed in a filing with the SEC, which is available at the SEC website. Insiders own 4.40% of the company’s stock.
Institutional investors and hedge funds have recently made changes to their positions in the business. PNC Financial Services Group Inc. boosted its stake in Steel Dynamics by 2.0% during the 2nd quarter. PNC Financial Services Group Inc. now owns 107,665 shares of the basic materials company’s stock worth $4,946,000 after purchasing an additional 2,136 shares during the last quarter. GWM Advisors LLC acquired a new position in shares of Steel Dynamics during the 2nd quarter valued at about $683,000. Northern Trust Corp boosted its position in shares of Steel Dynamics by 2.4% during the 2nd quarter. Northern Trust Corp now owns 2,679,485 shares of the basic materials company’s stock valued at $123,123,000 after acquiring an additional 63,716 shares during the last quarter. Nomura Asset Management Co. Ltd. boosted its position in shares of Steel Dynamics by 14.7% during the 2nd quarter. Nomura Asset Management Co. Ltd. now owns 40,678 shares of the basic materials company’s stock valued at $1,869,000 after acquiring an additional 5,214 shares during the last quarter. Finally, American International Group Inc. boosted its position in shares of Steel Dynamics by 0.6% during the 2nd quarter. American International Group Inc. now owns 474,862 shares of the basic materials company’s stock valued at $21,820,000 after acquiring an additional 2,709 shares during the last quarter. 83.43% of the stock is currently owned by institutional investors.
Steel Dynamics Company Profile
Steel Dynamics, Inc, together with its subsidiaries, engages in the steel products manufacturing and metals recycling businesses in the United States and internationally. The company operates through three segments: Steel Operations, Metals Recycling Operations, and Steel Fabrication Operations. The Steel Operations segment provides hot roll, cold roll, and coated steel products; structural steel beams, pilings, and standard and premium grade rail products; engineered special-bar-quality products; merchant bar products, including angles, merchant rounds, flats, channels, and reinforcing bars; beams, channels, and specialty steel sections; and threaded rod products, and cold drawn and heat treated bars.
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