Share Repurchase Plan Approved by Steel Dynamics (NASDAQ:STLD)

Key Points

• Steel Dynamics approved a $3 billion share repurchase plan, authorizing open-market buybacks of up to 8.8% of its shares.
• Its latest quarter showed revenue up 34.8% year over year to $6.51 billion, but EPS of $5.26 fell short of analysts’ $5.48 estimate.
• Analysts’ consensus rating was Moderate Buy, with an average price target of $275.17; the company also pays a quarterly dividend of $0.53 per share.

Steel Dynamics (NASDAQ:STLD - Get Free Report) declared that its board has initiated a share buyback plan on Monday, November 9th, RTT News reports. The company plans to buy back $3 billion in shares. This buyback authorization allows the basic materials company to buy up to 8.8% of its shares through open market purchases. Stock buyback plans are generally a sign that the company's management believes its stock is undervalued.

Steel Dynamics Stock Performance

Shares of NASDAQ STLD traded up $4.66 during trading on Monday, reaching $227.56. 899,084 shares of the company traded hands, compared to its average volume of 1,011,474. The stock has a market cap of $32.36 billion, a P/E ratio of 16.79, a PEG ratio of 0.34 and a beta of 1.45. The firm's fifty day simple moving average is $238.23 and its 200 day simple moving average is $225.13. The company has a current ratio of 3.14, a quick ratio of 1.48 and a debt-to-equity ratio of 0.43. Steel Dynamics has a 12-month low of $150.22 and a 12-month high of $288.74.

Steel Dynamics (NASDAQ:STLD - Get Free Report) last released its quarterly earnings data on Monday, October 19th. The basic materials company reported $5.26 earnings per share for the quarter, missing analysts' consensus estimates of $5.48 by ($0.22). The firm had revenue of $6.51 billion during the quarter, compared to analysts' expectations of $6.43 billion. Steel Dynamics had a net margin of 8.82% and a return on equity of 21.57%. The firm's quarterly revenue was up 34.8% on a year-over-year basis. During the same period in the previous year, the firm posted $2.74 EPS. As a group, research analysts anticipate that Steel Dynamics will post 18.12 earnings per share for the current fiscal year.

Steel Dynamics Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Friday, October 9th. Investors of record on Wednesday, September 30th were given a dividend of $0.53 per share. This represents a $2.12 annualized dividend and a yield of 0.9%. The ex-dividend date was Wednesday, September 30th. Steel Dynamics's dividend payout ratio (DPR) is presently 15.65%.

Analyst Ratings Changes

STLD has been the topic of several research reports. BNP Paribas Exane lifted their price objective on shares of Steel Dynamics from $275.00 to $276.00 and gave the company an "outperform" rating in a report on Wednesday, October 21st. UBS Group increased their target price on Steel Dynamics from $165.00 to $276.00 and gave the company a "neutral" rating in a research report on Monday, August 10th. Barclays set a $280.00 target price on Steel Dynamics in a research report on Friday, October 23rd. BMO Capital Markets cut their price target on Steel Dynamics from $296.00 to $290.00 and set an "outperform" rating on the stock in a report on Tuesday, September 29th. Finally, The Goldman Sachs Group reissued a "buy" rating and issued a $299.00 price target (down from $301.00) on shares of Steel Dynamics in a research report on Tuesday, October 20th. Nine analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the stock. Based on data from MarketBeat, Steel Dynamics presently has a consensus rating of "Moderate Buy" and a consensus target price of $275.17.

Insider Activity

In related news, EVP Barry Schneider sold 50,000 shares of the stock in a transaction that occurred on Tuesday, November 3rd. The stock was sold at an average price of $248.91, for a total value of $12,445,500.00. Following the completion of the transaction, the executive vice president directly owned 196,399 shares in the company, valued at approximately $48,885,675.09. This represents a 20.29% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. 6.60% of the stock is owned by corporate insiders.

Steel Dynamics Company Profile

Steel Dynamics, Inc is a U.S.-based steel producer and metals recycler founded in 1993. The company operates electric-arc-furnace steel mills and produces flat-rolled, structural, engineered bar, merchant bar and rail products for customers across a range of industries.

Its businesses also include metals recycling, steel fabrication and aluminum operations. Through these activities, Steel Dynamics collects and processes scrap metal, manufactures steel components and supplies products used in construction, automotive manufacturing, energy and other markets.

Headquartered in Fort Wayne, Indiana, the company serves customers primarily in the United States and Mexico.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.