We recently published a list of 10 Best Steel Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Worthington Steel, Inc. (NYSE:WS) stands against other best steel stocks to buy according to billionaires.
The steel sector remains vital to global infrastructure and manufacturing, and continuous growth is expected. The Business Research Company reported that the steel processing market is expected to grow from $714.7 billion in 2024 to $733.2 billion in 2025 at a CAGR of 2.6%. This growth depends on industrial expansion, infrastructure investments, and demand from the construction, automotive, and energy sectors. Furthermore, innovations in steel alloys, smart infrastructure, and a shift toward electric vehicles (EVs) will drive future growth. This bright future projection comes on the back of a strong sector performance in the recent past.
The steel sector has delivered an 8.92% year-to-date (YTD) return, beating the broader market’s decline of over 4%. This shows investor trust and confidence amid infrastructure investments and solid demand. Furthermore, according to the World Steel Association, the automotive sector drives 12% of global steel demand. The shift to electric vehicles has boosted demand for lightweight, high-strength steel. S&P Global Mobility expects battery EV sales to reach 15.1 million units in 2025, up 30% from 2024, making up 16.7% of light vehicle sales. Due to higher steel consumption, this trend is expected to benefit steel producers investing in advanced materials.
However, decarbonization remains crucial, as steelmaking causes 7% of global greenhouse gas emissions, according to a report by PwC. Stricter rules are pushing producers toward greener methods, and by 2040, at least 25% of the global steel capacity is expected to be decarbonized. Coal-based furnaces are at risk of becoming stranded assets, with potential losses of up to $518 billion. Thus, many companies are switching to electric arc furnaces (EAFs), which can be carbon-neutral with renewable power. Furthermore, according to Research and Markets, the global steel scrap market, sized at 543.2 million metric tons in 2024, should reach 727.1 million metric tons by 2030 at a CAGR of 5.0%. Recycling 1,000 kg of steel saves 1,400 kg of iron ore, 740 kg of coal, and 120 kg of limestone. Thus, steel recycling drives sustainability by cutting energy use and consumption of raw materials.
Moreover, government policies continue to shape the industry, such as Trump’s 25% tariff on steel and aluminum imports. This was aimed at helping U.S. manufacturers but raised costs and impacted prices across consumer and industrial goods. Recently, a 25% tariff was imposed on Mexican steel melted and poured outside North America to target transshipments.
While regulations and trade policies will affect costs, the steel industry is set for growth in 2025, backed by infrastructure spending, automotive demand, and green investments. The ability to innovate and adapt to decarbonization will be key to driving long-term success.
Methodology
To curate a list of the 10 Best Steel Stocks to Buy According to Billionaires, we analyzed Insider Monkey’s exclusive database of billionaire stock holdings. We selected the 10 best stocks to buy based on the highest number of billionaire investors, updated as of Q4 2024. For the stocks with the same number of billionaire holdings, we have used the total value of billionaire holdings as a secondary metric to rank the stocks.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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Worthington Steel, Inc. (NYSE:WS)
Number of Billionaire Investors: 7
Worthington Steel, Inc. (NYSE:WS) is a North American steel processor, focusing on carbon flat-rolled steel, tailor-welded blanks, and electrical steel lamination stampings. The company caters to various markets, such as the automotive, construction, heavy trucking, and energy sectors.
For Q2 ended November 30, 2024, Worthington Steel, Inc. (NYSE:WS) earned $12.8 million ($0.25 per share), compared to a $6 million loss ($0.12 per share) in the same period last year. Adjusted EBITDA increased to $30.6 million from $23 million the previous year, due to better gross margins despite reduced volumes and prices.
Yet, quarterly revenue fell 9% year-over-year to $739 million, with a 3% drop in shipments. This drop stemmed mainly from softer demand in the automotive and construction sectors. On the plus side, the company saw a reduction in inventory holding losses, improving by $21.4 million year-over-year.
Worthington Steel, Inc. (NYSE:WS) pushed its growth plan by buying a 52% stake in Sitem Group, boosting its reach in Europe’s expanding electrical steel lamination market. The company also made operational gains, reducing scrap waste and fine-tuning inventory through new analytics tools.
Looking ahead, Worthington Steel, Inc. (NYSE:WS) expects modest growth in construction, with a possible upturn later in the year. Therefore, with robust business expansion and operational improvements, Worthington Steel is well-positioned as one of the best steel stocks.
Overall, WS ranks 8th on our list of best steel stocks to buy according to billionaires. While we acknowledge the potential of WS, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
