$Nucor (NUE.US)$ Nue definitely has a premium over the other...
$Nucor(NUE.US$ Nue definitely has a premium over the other steel companies because it has had a solid record of paying dividends without cutting them and a stronger balance sheet. It is the JNJ of the steel world as you pay for the quality, balance sheet safety and history. I think all of the steel companies are cheap given their cash flow and growing revenues/earnings.
The caution by many analysts and investors is whether high steel prices are the new norm and if steel companies are now at the top of their cyclical pattern. The 4th quarter is going to be another blowout in earnings by all of the steel entities and likely the 1Q of 2022. The CEO of CLF has said that 2022 will be stronger than 2021. Whether steel prices drop next year or in the future, the balance sheets are drastically improving in real time for all of the companies. They will return more capital to shareholders in the future with increased dividends and buybacks. They will also be able to whether a downturn better in the future with better credit ratings and less debt to deal with.
The writing is on the wall if investors are following the quarterly reports. The industry has consolidated in the last decade and tariffs will keep U.S. steel companies protected from foreign steel. These are high beta stocks so it doesn't surprise me to see huge swings in share prices but the important thing is to keep your eye on the quarterly reports and balance sheets as each quarter is getting stronger with time.
The caution by many analysts and investors is whether high steel prices are the new norm and if steel companies are now at the top of their cyclical pattern. The 4th quarter is going to be another blowout in earnings by all of the steel entities and likely the 1Q of 2022. The CEO of CLF has said that 2022 will be stronger than 2021. Whether steel prices drop next year or in the future, the balance sheets are drastically improving in real time for all of the companies. They will return more capital to shareholders in the future with increased dividends and buybacks. They will also be able to whether a downturn better in the future with better credit ratings and less debt to deal with.
The writing is on the wall if investors are following the quarterly reports. The industry has consolidated in the last decade and tariffs will keep U.S. steel companies protected from foreign steel. These are high beta stocks so it doesn't surprise me to see huge swings in share prices but the important thing is to keep your eye on the quarterly reports and balance sheets as each quarter is getting stronger with time.
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Kieron Morley : For 3Q21, both CLF and X had a higher EBITDA margin than NUE. You can look it up, if you don't believe it. MT? Not a US company, so less relevant to the discussion.
The point being, the latest quarter hints at the consolidating US industry hints that the newly rationalized integrated producers X and CLF have caught up with NUE on costs and profitability.
Spider-Man to moon : X and CLF both will outperform NUE over next 12 months IMO.
Sam White : Wouldn't STLD be a more relevant comparison than X, CLF or MT?
GoldenGold : The global economy is recovering strongly, especially as the growth rate of the manufacturing industry is accelerating, the demand for industrial steel is expected to maintain a relatively high growth rate