Must-know: An overview of Reliance Steel & Aluminum (Part 8 of 9)
Reliance Steel’s performance
Reliance Steel & Aluminum Co. (RS) came up with its initial public offering (or IPO) in 1994. The stock has grown at a compounded annual growth rate of 18% from its IPO to the end of 2013. This is no mean performance. The overall markets have not returned such returns.
Let’s now compare the performance of Reliance Steel to other steel makers like ArcelorMittal (MT), United States Steel Corporation (X), and Nucor Corporation (NUE).
Comparing Reliance Steel’s performance to its peers
The chart above shows ten-year returns for Reliance Steel, compared to other steel companies. You can see that the stock has outperformed all other steel companies. Also, ArcelorMittal and U.S. Steel have generated negative returns in the past ten years.
The performance of Reliance Steel was comparable to other steel companies until 2008. But it’s the performance after the recession that made the difference. While Reliance Steel reached its pre-crisis highs this year, no other steel maker is near that mark.
Reliance Steel’s dividend yield
The chart above only shows the share market returns of Reliance Steel. The company also pays dividends, with its current dividend yield close to 2%. The company consistently pays quarterly cash dividends. It increased its regular dividends 21 times since its IPO in 1994. The dividends increased 6195% since its IPO. The yield is pretty healthy and only Nucor can boast of higher dividends among other steel companies.
Normally, higher dividend paying companies lag behind their peers on the exchanges. But Reliance Steel has the dual distinction of generating higher market returns along with maintaining a high dividend policy.
Please note that along with the companies listed above, the steel industry can also be accessed through the SPDR S&P Metals and Mining ETF (XME).
Browse this series on Market Realist:
- Part 1 - Overview of Reliance Steel & Aluminum Co.
- Part 2 - Must-know: Reliance Steel & Aluminum’s diversified business
- Part 3 - Why customers and investors can rely on Reliance Steel & Aluminum
- Investment & Company Information
- Reliance Steel & Aluminum Co.