Schnitzer Steel Industries (DB:SS1A) - Share price, News & Analysis

Q: What is the Fair Price of SS1A when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

SS1A (€30.8) is trading below our estimate of [[fair value]] (€894.23)

SS1A fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	5/6
Financial Health	6/6
Dividends	5/6

SS1A Stock Overview

Schnitzer Steel Industries, Inc. recycles ferrous and nonferrous metal, and manufactures finished steel products worldwide.

Rewards

Trading at 96.6% below our estimate of its fair value

Earnings have grown 15.7% per year over the past 5 years

Pays a reliable dividend of 2.32%

Risk Analysis

Earnings are forecast to decline by an average of 19.2% per year for the next 3 years

Volatile share price over the past 3 months

Schnitzer Steel Industries Competitors

Salzgitter

XTRA:SZG

€1.1b

thyssenkrupp

XTRA:TKA

€3.0b

Eisen- und Hüttenwerke

DB:EIS

€204.2m

Sto SE KGaA

XTRA:STO3

€841.8m

Price History & Performance

Summary of all time highs, changes and price drops for Schnitzer Steel Industries
Historical stock prices
Current Share Price	US$30.80
52 Week High	US$54.00
52 Week Low	US$30.80
Beta	1.51
1 Month Change	-21.83%
3 Month Change	-32.75%
1 Year Change	-25.24%
3 Year Change	38.74%
5 Year Change	42.43%
Change since IPO	463.42%

Shareholder Returns

	SS1A	DE Metals and Mining	DE Market
7D	-6.7%	-15.1%	-5.9%
1Y	-25.2%	-34.2%	-25.7%

Return vs Industry: SS1A exceeded the German Metals and Mining industry which returned -31.2% over the past year.

Return vs Market: SS1A matched the German Market which returned -24.4% over the past year.

Price Volatility

Is SS1A's price volatile compared to industry and market?
SS1A volatility
SS1A Average Weekly Movement	7.4%
Metals and Mining Industry Average Movement	7.6%
Market Average Movement	5.6%
10% most volatile stocks in DE Market	10.2%
10% least volatile stocks in DE Market	2.8%

Stable Share Price: SS1A is more volatile than 75% of German stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: SS1A's weekly volatility (7%) has been stable over the past year, but is still higher than 75% of German stocks.

About the Company

Founded	Employees	CEO	Website
1906	3,167	Tamara Lundgren	https://www.schnitzersteel.com

Schnitzer Steel Industries, Inc. recycles ferrous and nonferrous metal, and manufactures finished steel products worldwide. The company acquires, processes, and recycles salvaged vehicles, rail cars, home appliances, industrial machinery, manufacturing scrap, and construction and demolition scrap. It offers recycled ferrous metal, a feedstock used in the production of finished steel products; and nonferrous products, including mixed metal joint products recovered from the shredding process, such as zorba, zurik, aluminum, copper, stainless steel, nickel, brass, titanium, lead, and high temperature alloys.

Schnitzer Steel Industries Fundamentals Summary

How do Schnitzer Steel Industries's earnings and revenue compare to its market cap?
SS1A fundamental statistics
Market Cap	US$886.81m
Earnings (TTM)	US$201.30m
Revenue (TTM)	US$3.44b

4.4x

P/E Ratio

0.3x

P/S Ratio

Is SS1A overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SS1A income statement (TTM)
Revenue	US$3.44b
Cost of Revenue	US$2.94b
Gross Profit	US$493.92m
Other Expenses	US$292.62m
Earnings	US$201.30m

Last Reported Earnings

May 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	7.33
Gross Margin	14.37%
Net Profit Margin	5.86%
Debt/Equity Ratio	33.3%

How did SS1A perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

10%

Payout Ratio

Does SS1A pay a reliable dividends?

See SS1A dividend history and benchmarks

When do you need to buy SS1A by to receive an upcoming dividend?
Schnitzer Steel Industries dividend dates
Ex Dividend Date	Jul 08 2022
Dividend Pay Date	Jul 25 2022
Days until Ex dividend	2 days
Days until Dividend pay date	19 days

Does SS1A pay a reliable dividends?

See SS1A dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is SS1A undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SS1A?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SS1A. This is calculated by dividing SS1A's market cap by their current preferred multiple.
What is SS1A's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$886.81m

SS1A key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.4x
Enterprise Value/EBITDA	4.6x
PEG Ratio	-0.2x

Price to Earnings Ratio vs Peers

How does SS1A's PE Ratio compare to its peers?

SS1A PE Ratio vs Peers

The above table shows the PE ratio for SS1A vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	10.3x
SZG Salzgitter	1.3x	-47.9%	€1.1b
TKA thyssenkrupp	3.4x	-29.4%	€3.0b
EIS Eisen- und Hüttenwerke	26.7x	n/a	€204.2m
STO3 Sto SE KGaA	9.1x	2.8%	€841.8m
SS1A Schnitzer Steel Industries	4.4x	-19.2%	€886.8m

Forward PE

Price-To-Earnings vs Peers: SS1A is good value based on its Price-To-Earnings Ratio (4.4x) compared to the peer average (10.3x).

Price to Earnings Ratio vs Industry

How does SS1A's PE Ratio compare vs other companies in the European Metals and Mining Industry?

Price-To-Earnings vs Industry: SS1A is expensive based on its Price-To-Earnings Ratio (4.4x) compared to the German Metals and Mining industry average (3.5x)

Price to Earnings Ratio vs Fair Ratio

What is SS1A's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SS1A PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	4.4x
Fair PE Ratio	7.6x

Price-To-Earnings vs Fair Ratio: SS1A is good value based on its Price-To-Earnings Ratio (4.4x) compared to the estimated Fair Price-To-Earnings Ratio (7.6x).

Share Price vs Fair Value

What is the Fair Price of SS1A when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SS1A (€30.8) is trading below our estimate of fair value (€894.23)

Significantly Below Fair Value: SS1A is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: SS1A's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is Schnitzer Steel Industries forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-19.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SS1A's earnings are forecast to decline over the next 3 years (-19.2% per year).

Earnings vs Market: SS1A's earnings are forecast to decline over the next 3 years (-19.2% per year).

High Growth Earnings: SS1A's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SS1A's revenue (2.2% per year) is forecast to grow slower than the German market (4.7% per year).

High Growth Revenue: SS1A's revenue (2.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if SS1A's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Schnitzer Steel Industries performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

15.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SS1A has high quality earnings.

Growing Profit Margin: SS1A's current net profit margins (5.9%) are higher than last year (5.3%).

Past Earnings Growth Analysis

Earnings Trend: SS1A's earnings have grown by 15.7% per year over the past 5 years.

Accelerating Growth: SS1A's earnings growth over the past year (59.3%) exceeds its 5-year average (15.7% per year).

Earnings vs Industry: SS1A earnings growth over the past year (59.3%) underperformed the Metals and Mining industry 101.9%.

Return on Equity

High ROE: SS1A's Return on Equity (21.2%) is considered high.

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Financial Health

How is Schnitzer Steel Industries's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SS1A's short term assets ($787.9M) exceed its short term liabilities ($380.9M).

Long Term Liabilities: SS1A's short term assets ($787.9M) exceed its long term liabilities ($563.7M).

Debt to Equity History and Analysis

Debt Level: SS1A's net debt to equity ratio (31.6%) is considered satisfactory.

Reducing Debt: SS1A's debt to equity ratio has reduced from 35.5% to 33.3% over the past 5 years.

Debt Coverage: SS1A's debt is well covered by operating cash flow (61.4%).

Interest Coverage: SS1A's interest payments on its debt are well covered by EBIT (34x coverage).

Balance Sheet

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Dividend

What is Schnitzer Steel Industries's current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.32%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: SS1A's dividend (2.32%) is higher than the bottom 25% of dividend payers in the German market (1.5%).

High Dividend: SS1A's dividend (2.32%) is low compared to the top 25% of dividend payers in the German market (4.57%).

Stability and Growth of Payments

Stable Dividend: SS1A's dividends per share have been stable in the past 10 years.

Growing Dividend: SS1A's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (10.5%), SS1A's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (35.9%), SS1A's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

7.0yrs

Average management tenure

CEO

Tamara Lundgren (64 yo)

13.58yrs

Tenure

US$10,149,463

Compensation

Ms. Tamara L. Lundgren, J.D., has been the President, Chief Executive Officer and Director of Schnitzer Steel Industries, Inc. since December 1, 2008 and has been its Chairman since March 27, 2020. She joi...

CEO Compensation Analysis

Compensation vs Market: Tamara's total compensation ($USD10.15M) is above average for companies of similar size in the German market ($USD1.38M).

Compensation vs Earnings: Tamara's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: SS1A's management team is seasoned and experienced (7 years average tenure).

Board Members

Experienced Board: SS1A's board of directors are considered experienced (8.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: SS1A insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/05 00:00
End of Day Share Price	2022/07/05 00:00
Earnings	2022/05/31
Annual Earnings	2021/08/31