Tuesday, December 6, 2011

Steel Dynamics, Inc. - STLD

Steel Dynamics, Inc., stock ticker STLD, is the nation’s fifth largest producer of carbon steel products. Based in Fort Wayne, Indiana, SDI employs about 6,100 individuals and operates five electric furnace mini mills. Over 60% of STLD's steel shipments are flat rolled sheet steel and the remainder is long products (i.e. bars and beams) and fabricated products. STLD is among the most profitable American steel companies in terms of profit margins and operating profit per ton.

The primary sources of STLD's revenues are from the manufacture and sale of steel products, processing and sale of recycled ferrous and nonferrous metals, and the fabrication and sale of steel joist and decking products. STLD operates in three segments: steel operations, metals recycling and ferrous resources operations, and steel fabrication operations. During the year ended 12/31/10 actual metals recycling shipments were 5.2 million gross tons of ferrous materials, and 961 million pounds of nonferrous metallics. During 2010, its steel shipments were 5.3 million tons.

STLD had an outstanding third quarter 2011. Their net income was $43.3 million, or $0.19 per diluted share, during the third quarter of 2011, compared with net income of $18.7 million, or $0.09 per diluted share, during the third quarter of 2010, and net income of $98.7 million, or $0.43 per diluted share, during the second quarter of 2011. Their net sales increased $459.3 million, or 29%, to $2.0 billion in the third quarter of 2011 versus the third quarter of 2010, and net sales decreased $36.3 million, or 2%, versus the second quarter of 2011. Their gross profit percentage was 10% during the third quarter of 2011 as compared to 9% for the third quarter of 2010, and 13% for the second quarter of 2011.

STLD pays a pretty sweet 10 cent dividend, which is currently a 2.96% dividend yield (12/6/11 stock price of $13.78). Their financials show that they can support the dividend payments and should increase as the economy improves. STLD sold at $39.47 back in June 13th, 2008 and it will go back to that all time high eventually. This stock was shot down for no real reason other than the Great Recession. I believe construction is going to FLY HIGH in 2012. Steel demand will rise as construction conditions improve. Another positive for STLD is that they incur no union pension costs. They have a productive staff due to pay for production and safety. Also, welded rail is unique to the market and helped reduce the reliance on flat products.

Please visit STLD's Investor relations page, here and visit their website, here. Enjoy the videos below. Steel rules! America will need alot of it once the new housing market improves. Purchasing STLD tomorrow is a great investment in steel, which will safeguard your Roth IRA. STLD is a great growth stock and shows alot of promise.

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