The steel industry is part of the basic materials sector and consists of companies involved in steel production, mining and related activities. Although steel has historically been a major U.S. industry, the number of steel mills that produce the metal has declined sharply in the past several decades due to foreign competition. The top steel companies today include Allegheny Technologies, Inc. (ATI) and Ternium S.A. (TA). Over the 12-month trailing period, the steel industry, as represented by the VanEck Vectors Steel ETF (SLX), has seen its price grow by 1.3%, dramatically short of the S&P 500, which has grown by 27.2%. All figures are as of January 14, 2020.
Below, we'll examine the top three stocks in the steel industry for best value, fastest earnings growth, and most momentum.
Best Value Steel Stocks
Here are the steel stocks in the S&P 500 with the lowest 12-month trailing price-to-earnings (P/E) ratio in the sector. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Steel Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Cleveland-Cliffs Inc. (CLF)||7.90||2.1||2.7|
|United States Steel Corp. (X)||10.91||1.9||3.0|
|Mechel PJSC (MTLPR)||0.76||0.2||3.6|
- Cleveland-Cliffs Inc.: Cleveland-Cliffs produces mines iron ore, produces iron ore pellets, lumps, and other materials for use in the global steel industry. In December 2019, Cleveland-Cliffs announced that it had entered into a definitive merger agreement under which it will acquire AK Steel Holding Corp.
- United States Steel Corp.: Integrated steel producer United States Steel is involved in multiple stages of the steel production process and serves customers in industries ranging from automotive to industrial machinery. Last quarter, United States Steel bought a 49.9% equity stake in Big River Steel for about $700 million.
- Mechel PJSC: Russia-based Mechel is one of the world's largest metal and mining companies with operations in 11 Russian regions as well as abroad. The company is made up of 20 fully integrated enterprises that produce iron, coal, steel, rolled products, ferraolloys and electric power.
Fastest Growing Steel Stocks
Here are the steel stocks in the S&P 500 with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Steel Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Commercial Metals Co. (CMC)||22.22||2.6||311.3|
|Worthington Industries Inc. (WOR)||40.90||2.3||63.2|
|Reliance Steel & Aluminum Co. (RS)||121.24||8.1||18.2|
- Commercial Metals Co.: Commercial Metals works in steel, industrial minerals, ferroalloys, and other metals. The company is involved in manufacturing and recycling.
- Worthington Industries Inc.: Worthington Industries is a diversified metals company that manufactures equipment for heavy machinery, ceiling grid materials, and more. In its Q2 FY 2020, Worthington saw net sales decline by 14% YOY.
- Reliance Steel & Aluminum Co.: Reliance Steel & Aluminum specializes in processing and distributing steel and aluminum products to partners around the U.S. For Q3 2019, Reliance Steel & Aluminum reported gross profit margin of 30.3%.
Steel Stocks with the Most Momentum
These are the steel stocks in the S&P 500 that had the greatest price increase over the past 12 months.
|Steel Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Price Change (%)|
|Reliance Steel & Aluminum Co. (RS)||121.24||8.1||59.9|
|Commercial Metals Co. (CMC)||22.22||2.6||40.2|
|Companhia Siderurgica Nacional (SID)||3.56||4.9||37.5|
|VanEck Vectors Steel ETF (SLX)||N/A||N/A||1.3|
|S&P 500 (SPY)||N/A||N/A||27.2|
- Reliance Steel & Aluminum Co.: See company description above.
- Commercial Metals Co.: See company description above.
- Companhia Siderurgica Nacional: Among the largest steel-makers in Latin America, Brazil-based Companhia Siderurgica Nacional produces a variety of semi-finished steel products for use across multiple industries.
Cleveland-Cliffs, Inc. "Cleveland-Cliffs to Acquire AK Steel," Accessed Jan. 14, 2020.
United States Steel Corp. "United States Steel Corporation to Acquire 49.9% Interest in Big River Steel Creating Partnership With Clear Path to Consolidation," Accessed Jan. 15, 2020.
Worthington Industries Inc. "Worthington Reports Second Quarter Fiscal 2020 Results," Accessed Jan. 14, 2020.
Reliance Steel & Aluminum Co. "Reliance Steel & Aluminum Co. Reports Third Quarter 2019 Financial Results," Accessed Jan. 14, 2020.