Steel Dynamics (STLD) has plenty of things going in its favor. It's one of the best managed steel companies in the United States; it has a low, highly variable cost structure, which has helped it post superior margins throughout the last two challenging years for the steel markers. It has a diversified product mix, a secure supply of recycled ferrous metals, and an experienced senior management team.
Steel dynamics has one of the lowest operating cost structures in the North American steel industry. The company's low operating costs are driven by high labor efficiency as well as a transportation cost advantage in the upper Midwest.
STLD is also well positioned to benefit from improving steel demand, with end-markets including construction, automotive, machinery all showing signs of improvement. For dividend seeking investors STLD also has a very attractive dividend yield of 2.6%.