The Trump administration recently slapped import duties on certain types of Vietnamese steel made from Chinese imports that the government felt was circumventing the anti-dumping duties imposed on Chinese steel. Trump’s opposition to using Chinese steel, coupled with his promise to boost manufacturing, bodes well for the U.S. steel industry. The president plans to put one trillion dollars into infrastructure. In addition, relaxed regulations and corporate tax cuts promise to make the materials sector prosperous. (See also: Trump's Wall Could Be Great News for Steel Stocks.)

All this will help the steel industry, and indeed, companies focused primarily on steel have been gaining over the last twelve months. Here are three that appear poised for future gains.

Note: These stocks were chosen based on industry focus, market cap and one-year return. All figures are current as of November 3, 2017.

Steel Dynamics Inc. (STLD)

Steel Dynamics is leading the sector gains, up 1.06% over the past year. Analysts expect sales growth of 20.9% in 2017 and potential earnings per share growth of 44%.

The company manufactures and recycles steel products. It works in sheet steel, coated steel, steel beams, rails, threaded rods and steel bars. The company has an extensive scrap metal operation.

  • Avg. Volume: 2.82 million
  • Market Cap: $9.3 billion
  • EPS (TTM): $2.18
  • Dividend Yield: 1.65%
  • 1y Target Est: 41.21

Nucor Corporation (NUE)

This company is a leading U.S. steel provider with its headquarters in Charlotte, North Carolina. Its operations include steel mills, steel products and raw materials. It is heavily involved in construction, which positions Nucor to profit from Trump’s focus on infrastructure. Its connections in the construction of highways, bridges, hospitals, schools and airports put it squarely in the sights of Trump’s building plans. In addition, Nucor has a strong presence in the auto industry and the energy sector. This is no newcomer to the steel business. The company dates back to 1940.

The stock is trading at $58. It has lost 11% over the past year. It is the largest of its steel competitors with a market cap of $18.5 billion.

  • Avg. Volume: 2.46 million
  • Market Cap: $18.5 billion
  • EPS (TTM): $3.56
  • Dividend Yield: 2.60%
  • 1y Target Est: $65.63

United States Steel (X)

United States Steel recorded a return of -13.8% over the past twelve months. The company was founded in 1901 and has its headquarters in Philadelphia, Pennsylvania. It provides steel products and solutions for infrastructure, automotive, appliance, container, industrial machinery, construction and energy companies.

Analysts are expecting revenue growth of 16.7% for 2017 with potential earnings per share of $1.95. The company has a market cap of $5.4 billion. It is trading at $31.

  • Avg. Volume: 11.6 million
  • Market Cap: $5.4 billion
  • EPS (TTM): $0.70
  • Dividend Yield: 0.67%
  • 1y Target Est: $28.36

The Bottom Line

In the information age, it is easy to think of steel as an old-fashioned industry that has seen better days. The truth is, steel is coming into its own once again as a vital product. If the United States leads the way in rebuilding infrastructure, steel stocks could be a superior investment. (See also: Democrats Propose $1 Trillion Infrastructure Plan.)

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