The steel industry is part of the basic materials sector and consists of companies involved in steel production, mining, and related activities. Although steel historically has been a major U.S. industry, the number of steel mills that produce the metal has declined sharply in the past several decades due to foreign competition. Some of the big names in the global steel industry include U.K.-based Rio Tinto PLC, Brazil-based Vale SA, and Reliance Steel & Aluminum Co.
Steel demand rebounded more than expected in 2021, rising by 4.5%. The World Steel Association forecasts that steel demand will continue to increase this year, but at a much slower pace, rising 2.2%. The global steel industry is facing pressure to increase production as Europe moves to ban key Russian iron ore and steel products in response to Russia’s invasion of Ukraine in February. Steel shipments to Europe already have fallen due to sanctions on Russian steel oligarchs.
Steel stocks, as represented by the VanEck Vectors Steel ETF (SLX), outperformed the broader market in the past year. SLX’s total return was 20.8% compared to the Russell 1,000 Index’s total return of 5.9%. These figures and all statistics in the tables below are as of March 15, 2022.
Here are the top 3 steel stocks with the best value, the fastest growth, and the most momentum.
These are the steel stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Steel Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Mechel PAO (MTL)||2.25||0.6||0.6|
|EVRAZ PLC (EVRZF)||1.22||1.8||0.6|
|Ternium SA (TX)||39.73||7.8||2.0|
- Mechel PAO: Mechel PAO is a Russia-based mining, steel, and power company. The company produces semi-finished steel, coke, iron ore, chemical products, and electricity.
- EVRAZ PLC: EVRAZ is a U.K.-based vertically integrated steel, mining and vanadium company. It produces steel beams, reinforcement bars, railroad rails, and similar products. It operates in Russia, the U.S., Canada, the Czech Republic, and Kazakhstan. On March 11, the company announced that it would suspend the process of the demerger of its coal assets under PJSC Raspadskaya indefinitely. The reason for the suspension is that EVRAZ is awaiting clarification regarding regulatory restrictions, including related to sanctions imposed by the U.K.
- Ternium SA: Ternium is a Luxembourg-based company that manufactures and processes steel products used in a broad range of industries including automotive, home appliances, energy, capital goods, and construction. Ternium announced on Feb. 24, that it would invest approximately $1 billion in new finishing lines, a new cold rolling mill, and other advancements to its Pesquería industrial center in Mexico. The aim of the investment program is to broaden Ternium’s value-added product portfolio.
These are the top steel stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Steel Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|United States Steel Corp. (X)||32.05||8.4||1,600||119.4|
|Cleveland-Cliffs Inc. (CLF)||25.34||13.3||1,110||137.0|
|Olympic Steel Inc. (ZEUS)||29.32||0.3||1,250||88.4|
- United States Steel Corp.: United States Steel is an American-based manufacturer and seller of steel products. It operates through three business segments: Flat-Rolled Products, U.S. Steel Europe, and Tubular Products. On Feb. 15, the company announced that Christine S. Breves, senior vice president and chief financial officer (CFO), would leave the company in 2022. Breves will continue to serve as CFO while the company conducts a search for a permanent replacement. The exact date of her departure as well as her successor were not named.
- Cleveland-Cliffs Inc.: Cleveland-Cliffs is a major North American flat-rolled steel producer and supplier of iron ore pellets. The company also supplies stainless steel tubing and other products. Cleveland-Cliffs reported results for Q4 2021 on Feb. 11. For that period, the company saw net income grow more than 12-fold, while revenues rose 136.9% year-over-year (YOY), driven in part by strong performance in the steelmaking business. Cleveland-Cliffs also announced a share buyback program that authorizes the company to buy back a maximum of $1 billion worth of shares.
- Olympic Steel Inc.: Olympic Steel is a processor and distributor of flat-rolled carbon, stainless, and tubular steel products. The company serves as an intermediary between steel producers and manufacturers utilizing steel in their operations.
These are the steel stocks that had the highest total return over the last 12 months.
|Steel Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Nucor Corp. (NUE)||135.52||36.5||98.5|
|TimkenSteel Corp. (TMST)||19.96||0.9||85.0|
|Stelco Holdings Inc. (STLC.TO)||47.42||3.5||79.3|
|VanEck Vectors Steel ETF (SLX)||N/A||N/A||20.8|
- Nucor Corp.: Nucor manufacturers steel and steel products, with operations in the United States, Canada, and Mexico. Nucor also brokers ferrous and non-ferrous metals and pig iron, supplies ferro-alloys, and processes ferrous and nonferrous scrap. The company announced in late February that CFO, Treasurer, and Executive Vice President Jim Frias will retire effective June 11. He transitioned out of the role as of March 6. Steve Laxton, previously vice president of business development and strategic planning, will succeed Frias and is working with him during the transition period.
- TimkenSteel Corp.: TimkenSteel manufactures and sells steel and mechanical components including steel bars, bearings, seals, tubes, and chains. The company’s major customers are in the oil and gas, industrial, mining, construction, and power generation industries.
- Stelco Holdings Inc.: Stelco Holdings is a Canada-based steelmaker that produces and sells steel products. Some of its products include flat-rolled value-added steels, pig iron, and metallurgical coke.
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