Steel Dynamics (NASDAQ:STLD) Shares Up 6.3% Following Strong Earnings

Key Points

• Steel Dynamics' shares rose 6.3% after the company reported earnings per share (EPS) of $2.74, exceeding expectations of $2.63, with revenue of $4.83 billion surpassing estimates of $4.74 billion.
• The company declared a quarterly dividend of $0.50 per share, equating to an annual dividend of $2.00 and a yield of 1.3%.
• Analysts broadly rate Steel Dynamics as a “Moderate Buy,” with a consensus target price currently set at $150.89.

Steel Dynamics, Inc. (NASDAQ:STLD - Get Free Report) shot up 6.3% during trading on Tuesday following a better than expected earnings announcement. The company traded as high as $154.79 and last traded at $155.48. 1,570,487 shares were traded during mid-day trading, an increase of 2% from the average session volume of 1,542,117 shares. The stock had previously closed at $146.28.

The basic materials company reported $2.74 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.63 by $0.11. The business had revenue of $4.83 billion during the quarter, compared to analyst estimates of $4.74 billion. Steel Dynamics had a return on equity of 11.88% and a net margin of 6.07%.Steel Dynamics's revenue for the quarter was up 11.2% on a year-over-year basis. During the same quarter in the prior year, the firm earned $2.05 earnings per share.

Steel Dynamics Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Friday, October 10th. Stockholders of record on Tuesday, September 30th were paid a dividend of $0.50 per share. This represents a $2.00 dividend on an annualized basis and a dividend yield of 1.3%. The ex-dividend date of this dividend was Tuesday, September 30th. Steel Dynamics's dividend payout ratio is 29.15%.

Wall Street Analyst Weigh In

A number of analysts have recently weighed in on the company. UBS Group set a $158.00 price objective on Steel Dynamics and gave the company a "buy" rating in a research note on Tuesday. Weiss Ratings reissued a "hold (c)" rating on shares of Steel Dynamics in a research note on Wednesday, October 8th. Wells Fargo & Company increased their price objective on Steel Dynamics from $143.00 to $150.00 and gave the company an "overweight" rating in a research note on Monday, September 15th. Finally, JPMorgan Chase & Co. increased their price objective on Steel Dynamics from $150.00 to $160.00 and gave the company a "neutral" rating in a research note on Monday, October 13th. Eight research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company. According to MarketBeat, Steel Dynamics presently has a consensus rating of "Moderate Buy" and a consensus target price of $150.89.

Insider Activity at Steel Dynamics

In related news, SVP Christopher A. Graham sold 12,000 shares of the company's stock in a transaction that occurred on Wednesday, July 30th. The stock was sold at an average price of $126.71, for a total transaction of $1,520,520.00. Following the completion of the transaction, the senior vice president owned 66,738 shares in the company, valued at $8,456,371.98. This represents a 15.24% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. 6.30% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Steel Dynamics

Hedge funds and other institutional investors have recently made changes to their positions in the business. Cary Street Partners Investment Advisory LLC raised its holdings in shares of Steel Dynamics by 493.9% during the first quarter. Cary Street Partners Investment Advisory LLC now owns 196 shares of the basic materials company's stock valued at $25,000 after acquiring an additional 163 shares in the last quarter. Financial Gravity Asset Management Inc. bought a new position in Steel Dynamics in the first quarter worth $25,000. Trust Co. of Toledo NA OH bought a new position in Steel Dynamics in the second quarter worth $30,000. Zions Bancorporation National Association UT bought a new position in Steel Dynamics in the first quarter worth $32,000. Finally, WPG Advisers LLC bought a new position in Steel Dynamics in the first quarter worth $32,000. Institutional investors own 82.41% of the company's stock.

Steel Dynamics Stock Performance

The business has a fifty day simple moving average of $135.96 and a 200-day simple moving average of $130.95. The company has a quick ratio of 1.34, a current ratio of 3.13 and a debt-to-equity ratio of 0.43. The firm has a market cap of $22.98 billion, a P/E ratio of 22.65, a P/E/G ratio of 1.17 and a beta of 1.40.

About Steel Dynamics

Steel Dynamics, Inc, together with its subsidiaries, operates as a steel producer and metal recycler in the United States. The Steel Operations segment offers hot rolled, cold rolled, and coated steel products; parallel flange beams and channel sections, flat bars, large unequal leg angles, and reinforcing steel bars, as well as standard strength carbon, intermediate alloy hardness, and premium grade rail products; engineered special-bar-quality products, merchant-bar-quality products, and other engineered round steel bars; channels, angles, flats, merchant rounds, and reinforcing steel bars; and specialty shapes and light structural steel products.

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