Head to Head Analysis: Commercial Metals (CMC) & Its Peers

Commercial Metals (NYSE: CMC) is one of 28 publicly-traded companies in the “Steel” industry, but how does it compare to its peers? We will compare Commercial Metals to related businesses based on the strength of its earnings, risk, profitability, institutional ownership, analyst recommendations, valuation and dividends.

Risk and Volatility

Commercial Metals has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, Commercial Metals’ peers have a beta of 1.37, indicating that their average share price is 37% more volatile than the S&P 500.

Earnings & Valuation

This table compares Commercial Metals and its peers top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Commercial Metals $4.82 billion $306.06 million 33.22
Commercial Metals Competitors $7.78 billion $1.01 billion 36.54

Commercial Metals’ peers have higher revenue and earnings than Commercial Metals. Commercial Metals is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

Commercial Metals pays an annual dividend of $0.48 per share and has a dividend yield of 2.2%. Commercial Metals pays out 73.8% of its earnings in the form of a dividend. As a group, “Steel” companies pay a dividend yield of 2.0% and pay out 60.2% of their earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Commercial Metals and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Commercial Metals 2 2 4 0 2.25
Commercial Metals Competitors 290 837 948 29 2.34

Commercial Metals currently has a consensus target price of $20.63, indicating a potential downside of 4.47%. As a group, “Steel” companies have a potential upside of 6.33%. Given Commercial Metals’ peers stronger consensus rating and higher probable upside, analysts clearly believe Commercial Metals has less favorable growth aspects than its peers.

Insider & Institutional Ownership

90.6% of Commercial Metals shares are held by institutional investors. Comparatively, 52.1% of shares of all “Steel” companies are held by institutional investors. 1.3% of Commercial Metals shares are held by insiders. Comparatively, 12.1% of shares of all “Steel” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Commercial Metals and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Commercial Metals 1.57% 7.84% 3.42%
Commercial Metals Competitors -984.91% 4.08% 3.80%

Summary

Commercial Metals peers beat Commercial Metals on 10 of the 15 factors compared.

Commercial Metals Company Profile

Commercial Metals Company, together with its subsidiaries, manufactures, recycles and markets steel and metal products, related materials and services through a network. The Company’s Americas Recycling segment processes scrap metals for use as a raw material by manufacturers of new metal products. The Americas Mills segment consists of steel mills, commonly referred to as minimills that produce reinforcing bar (rebar), angles, flats and rounds. Its Americas Fabrication segment consists of its steel fabrication facilities that bend, weld, cut and fabricate steel, primarily rebar. Its International Mill segment consists of its mill, recycling and fabrication operations located in Poland. Its International Marketing and Distribution segment includes international operations for the sales, distribution and processing of primary and secondary metals, fabricated metals, semi-finished, long and flat steel products, and other industrial products.

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