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Steel Dynamics (STLD) Buys 45% Stake in New Process Steel

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Steel Dynamics, Inc. STLD recently entered into a definitive agreement to acquire a 45% minority equity interest in New Process Steel, L.P., a metals solutions and distribution supply-chain management company headquartered in Houston, TX. The company aims to expand its value-added manufacturing applications with the deal.

New Process Steel has two manufacturing locations in Mexico and four manufacturing locations in the United States, two of which are at Steel Dynamics' Butler and Columbus Flat Roll Steel divisions. The current CEO of the company, Richard Fant, will independently operate New Process as the majority 55% equity holder and decision-maker. New Process is presently Steel Dynamics' single largest flat roll steel customer.

Steel Dynamics noted that the decision of holding minority equity interest in New Process with which it shares a strong customer relationship since its founding days will expand the company’s exposure to value-added manufacturing opportunities while it continues to serve other long-standing flat roll steel customer needs. Steel Dynamics is confident that the current leadership team of New Process will maintain the premium standards that have been set by it and continue to drive manufacturing growth.

New Process Steel is equally excited to further its long-time relationship with Steel Dynamics and welcomes the decision as a great opportunity to accelerate its growth within the value-added metals solutions and supply-chain strategy.

Steel Dynamic’s shares have risen 99.2% over a year compared with 84.8% growth of the industry.

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Zacks Investment Research

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In the third quarter of 2021, Steel Dynamics recorded adjusted earnings of $4.96 per share, rising from 51 cents in the year-ago quarter and marginally beating the Zacks Consensus Estimate of $4.95. The company’s revenues were $5,088.3 million in the quarter, rising 118.3% year over year.

In its third-quarter earnings call, Steel Dynamics stated that it is witnessing strong steel demand with customer steel inventory staying historically low throughout the supply chain. The automotive and the construction end markets remain strong and the company anticipates the momentum to continue in the fourth quarter. The company is also seeing strong order entry activity across its businesses, which along with low inventory, is supporting strong steel selling values. Steel Dynamics envisions the momentum to continue throughout 2021 and expects its fourth-quarter earnings to represent another record performance.

Steel Dynamics, Inc. Price and Consensus

Steel Dynamics, Inc. Price and Consensus
Steel Dynamics, Inc. Price and Consensus

Steel Dynamics, Inc. price-consensus-chart | Steel Dynamics, Inc. Quote

Zacks Rank & Other Stocks to Consider

Currently, Steel Dynamics carries a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks in the basic materials space include Acerinox, S.A. ANIOY, Aperam S.A. APEMY, and Nucor Corporation NUE, each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Acerinox has a projected earnings growth rate of 526.3% for the current year. The company’s shares have climbed 70.2% over the past year.

Aperam has a projected earnings growth rate of 469.6% for the current year. The company’s shares have risen 92% over the past year.

Nucor has a projected earnings growth rate of 581.1% for the current year. The company’s shares have surged 112.9% over the past year.


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Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report

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