If You Invested $1000 in Reliance Steel a Decade Ago, This is How Much It'd Be Worth Now
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Reliance Steel (RS) ten years ago? It may not have been easy to hold on to RS for all that time, but if you did, how much would your investment be worth today?
Reliance Steel's Business In-Depth
With that in mind, let's take a look at Reliance Steel's main business drivers.
Los Angeles, CA-based Reliance, Inc. is a leading metals service center company engaged in value-added materials management and metals processing services. It also distributes over 100,000 metal products to more than 125,000 customers across a vast spectrum of industries. Reliance is the biggest North American metals service center company based on revenues with more than 300 locations.
Reliance recorded net sales of $14,805.9 million in 2023. Its major products are carbon steel (55% of 2023 sales), aluminum (17%), stainless steel (16%) and alloy (5%).
Reliance has 200 processing and distribution centers spread across 39 states in the United States and in foreign countries such as Belgium, Canada, China, Malaysia, Mexico, Singapore, South Korea and the United Kingdom. Although the company has a diverse geographic presence, the southeastern region of the United States generates majority of its sales.
Reliance provides metals processing services such as cutting-to-length, blanking, slitting, burning, plasma burning, and precision plate sawing, sawing, and shearing, among others, all to customer specifications. These services save time and labor and reduce overall manufacturing costs for the customer. The company improves its operating results through strategic acquisitions and the expansion of its existing operations.
The company, in March 2018, completed its purchase of all of the issued and outstanding capital stock of DuBose National Energy Services, Inc. (DuBose Energy) and its affiliate, DuBose National Energy Fasteners & Machined Parts, Inc. (DuBose Fasteners) for an undisclosed price. DuBose Energy and DuBose Fasteners specialize in fabrication, supply and distribution of metal and metal products to the nuclear industry including utilities, component manufacturers and contractors.
Moreover, Reliance, in November 2018, completed the purchase of all of the membership interests of All Metals Holding, LLC, including its operating subsidiaries, All Metals Processing & Logistics, Inc. (“AMPL”) and All Metals Transportation and Logistics, Inc. (“AMTL”). AMPL specializes in toll processing for automotive, constructio
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Reliance Steel, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in March 2014 would be worth $4,660.19, or a gain of 366.02%, as of March 13, 2024, according to our calculations. This return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 177.02% and the price of gold went up 51.12% over the same time frame.
Going forward, analysts are expecting more upside for RS.
Reliance’s earnings and sales for the fourth quarter beat the respective Zacks Consensus Estimates. The company is poised to benefit from robust demand across the majority of its end markets in 2024. Notably, non-residential construction is experiencing a robust rebound, with expectations of sustained strength in demand in 2024, driven by healthy bidding activities. Reliance is also seeing steady demand in the automotive sector and significant improvements in commercial aerospace. It maintains its strategic focus on enhancing operational performance through acquisitions. Moreover, it is dedicated to delivering incremental returns to its shareholders, capitalizing on its strong cash flows. However, lower year-over-year prices may hurt the company’s top line in the first quarter. It also faces headwinds from the softness in semiconductor.
The stock is up 11.11% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 3 higher, for fiscal 2024. The consensus estimate has moved up as well.
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Reliance, Inc. (RS) : Free Stock Analysis Report
