Don’t Miss out on This Steel Dynamics, Inc. (STLD) Stock

Talking about the steel industry, Nucor Corporation (NYSE:NUE) still remains one of the best buys in the industry. Despite the fact that the steel industry didn’t have a good year (2012), Nucor performed well above par during the last year. It’s yielding a dividend of 3.10%, which is one of the best in the industry. Moreover, its 4Q12 results clearly show that it has a lot of cash on hand; hence, it would continue with its old policy of increasing dividends for its shareholders. Furthermore, it’s earning revenue per share and cash per share of $61 and $3.63, respectively. Earning operating margins of 5.45% in this sluggish industry isn’t a piece of cake either. In short, I definitely recommend buying Nucor. You can have a further look at my detailed take on Nucor here.

Conclusion

In 2013 and 2014, one of the biggest catalysts for Steel Dynamics will be the U.S. economy. Steel Dynamics’ beta of 1.68 clearly suggests that it’s a hugely cyclical company. With the U.S. economy and the steel industry slowly getting back on track, Nucor is certainly expected to do well in the coming years. Over the past few years, the government has been keen on increasing imports in the steel industry, which has negatively impacted the local U.S. industry. However, the encouraging news came in late 2012 – steel imports were down 13.9% from November to 2.3 million tons in December. As far as steel production is concerned, Steel Dynamics would be self sufficient in the years ahead amid Iron Dynamics and Minnesota operations, which in turn means a further reduction in costs of production. Moreover, the new iron concentrate facility, which started off in September, 2012, would be vital in reducing the input costs associated with the iron nugget facility. The bottom line is that Steel Dynamics still remains a good buy for the long run. Hence, we recommend buying Steel Dynamics for long term gains.

The article Don’t Miss out on This Steel Stock originally appeared on Fool.com and is written by Waqar Saif.

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