NYSE:CMC

Stock Analysis Report

Executive Summary

Commercial Metals Company manufactures, recycles, and markets steel and metal products, and related materials and services in the United States and internationally.


Snowflake Analysis

Undervalued with solid track record and pays a dividend.


Similar Companies

Share Price & News

How has Commercial Metals's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CMC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.7%

CMC

1.1%

US Metals and Mining

0.06%

US Market


1 Year Return

22.1%

CMC

-1.9%

US Metals and Mining

19.3%

US Market

Return vs Industry: CMC exceeded the US Metals and Mining industry which returned -1.9% over the past year.

Return vs Market: CMC exceeded the US Market which returned 19.3% over the past year.


Shareholder returns

CMCIndustryMarket
7 Day-2.7%1.1%0.06%
30 Day-4.6%-3.4%1.7%
90 Day0.05%0.4%9.0%
1 Year25.1%22.1%0.6%-1.9%21.8%19.3%
3 Year7.6%0%-0.8%-6.1%49.5%39.9%
5 Year52.8%33.8%20.9%11.6%73.1%54.1%

Price Volatility Vs. Market

How volatile is Commercial Metals's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Commercial Metals undervalued compared to its fair value and its price relative to the market?

33.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CMC ($20.56) is trading below our estimate of fair value ($30.8)

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


Price To Earnings Ratio

PE vs Industry: CMC is good value based on its PE Ratio (9.3x) compared to the Metals and Mining industry average (11.1x).

PE vs Market: CMC is good value based on its PE Ratio (9.3x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: CMC is good value based on its PB Ratio (1.4x) compared to the US Metals and Mining industry average (1.5x).


Next Steps

Future Growth

How is Commercial Metals forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

-10.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CMC's earnings are forecast to decline over the next 3 years (-10.4% per year).

Earnings vs Market: CMC's earnings are forecast to decline over the next 3 years (-10.4% per year).

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

Revenue vs Market: CMC's revenue (2.7% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: CMC's revenue (2.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CMC's Return on Equity is forecast to be low in 3 years time (12.4%).


Next Steps

Past Performance

How has Commercial Metals performed over the past 5 years?

17.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CMC has high quality earnings.

Growing Profit Margin: CMC's current net profit margins (4.4%) are higher than last year (2.5%).


Past Earnings Growth Analysis

Earnings Trend: CMC's earnings have grown by 17.6% per year over the past 5 years.

Accelerating Growth: CMC's earnings growth over the past year (113.5%) exceeds its 5-year average (17.6% per year).

Earnings vs Industry: CMC earnings growth over the past year (113.5%) exceeded the Metals and Mining industry -17.7%.


Return on Equity

High ROE: CMC's Return on Equity (15.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Commercial Metals's financial position?


Financial Position Analysis

Short Term Liabilities: CMC's short term assets ($2.0B) exceed its short term liabilities ($602.0M).

Long Term Liabilities: CMC's short term assets ($2.0B) exceed its long term liabilities ($1.5B).


Debt to Equity History and Analysis

Debt Level: CMC's debt to equity ratio (67.8%) is considered high.

Reducing Debt: CMC's debt to equity ratio has reduced from 107.3% to 67.8% over the past 5 years.

Debt Coverage: CMC's debt is well covered by operating cash flow (46.9%).

Interest Coverage: CMC's interest payments on its debt are well covered by EBIT (6.8x coverage).


Balance Sheet

Inventory Level: CMC has a high level of physical assets or inventory.

Debt Coverage by Assets: CMC's debt is covered by short term assets (assets are 1.7x debt).


Next Steps

Dividend

What is Commercial Metals's current dividend yield, its reliability and sustainability?

2.33%

Current Dividend Yield


Dividend Yield vs Market

company2.3%marketbottom25%1.4%markettop25%3.7%industryaverage2.6%forecastin3Years2.4%

Current dividend yield vs market & industry

Notable Dividend: CMC's dividend (2.33%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: CMC's dividend (2.33%) is low compared to the top 25% of dividend payers in the US market (3.71%).


Stability and Growth of Payments

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

Growing Dividend: CMC's dividend payments have not increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (21.6%), CMC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CMC's dividends in 3 years are forecast to be well covered by earnings (21.4% payout ratio).


Next Steps

Management

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

1.8yrs

Average management tenure


CEO

Barbara Smith (60yo)

2.4yrs

Tenure

US$7,648,588

Compensation

Ms. Barbara R. Smith has been the President and Chief Executive Officer of Commercial Metals Company (CMC) since January 11, 2017 and September 1, 2017 respectively. Ms. Smith has been the Chairman of Comm ...


CEO Compensation Analysis

Compensation vs Market: Barbara's total compensation ($USD7.65M) is above average for companies of similar size in the US market ($USD4.88M).

Compensation vs Earnings: Barbara's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Barbara Smith
Chairman2.4yrsUS$7.65m0.36% $8.9m
Paul Lawrence
VP & CFO0.4yrsUS$1.33m0.016% $383.7k
Tracy Porter
Executive VP & COO1.8yrsUS$3.70m0.24% $6.0m
Paul Kirkpatrick
Executive Officer0yrsUS$1.85m0.098% $2.4m
Adam Hickey
VP & Chief Accounting Officer3.1yrsno data0.020% $477.9k
Jennifer Durbin
Vice President of Human Resources0.08yrsno datano data
Steve Henderson
VP & Chief Supply Chain Officer0yrsno datano data
Jerzy Kozicz
Managing Director of CMC Poland0yrsno datano data
Brad Cottrell
VP & Chief Supply Chain Officer0yrsno datano data

1.8yrs

Average Tenure

49yo

Average Age

Experienced Management: CMC's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Barbara Smith
Chairman2.4yrsUS$7.65m0.36% $8.9m
Joseph Winkler
Lead Director0yrsUS$245.92k0.053% $1.3m
Rhys Best
Independent Director10.1yrsUS$224.17k0.074% $1.8m
Richard Kelson
Independent Director10.1yrsUS$236.43k0.010% $242.7k
Rick Mills
Independent Director8.1yrsUS$235.00k0.012% $286.1k
Charles Szews
Independent Director6.1yrsUS$225.00k0.036% $887.2k
Sarah Raiss
Independent Director9.1yrsUS$220.55k0.047% $1.1m
J. Smith
Independent Director16.1yrsUS$225.07k0.078% $1.9m
Vicki Avril-Groves
Independent Director6.1yrsUS$221.37k0.019% $451.5k
Peter Matt
Director0.08yrsno datano data

8.1yrs

Average Tenure

66.5yo

Average Age

Experienced Board: CMC's board of directors are considered experienced (8.1 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

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


Top Shareholders

Company Information

Commercial Metals Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Commercial Metals Company
  • Ticker: CMC
  • Exchange: NYSE
  • Founded: 1915
  • Industry: Steel
  • Sector: Materials
  • Market Cap: US$2.439b
  • Shares outstanding: 118.65m
  • Website: https://www.cmc.com/en/asia/home

Number of Employees


Location

  • Commercial Metals Company
  • 6565 North MacArthur Boulevard
  • Suite 800
  • Irving
  • Texas
  • 75039
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CMCNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
CMSDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968

Biography

Commercial Metals Company manufactures, recycles, and markets steel and metal products, and related materials and services in the United States and internationally. It operates through four segments: Americas Recycling, Americas Mills, Americas Fabrication, and International Mill. The Americas Recycling segment processes and sells scrap metals to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers. The Americas Mills segment manufactures finished long steel products, including reinforcing bars (rebars), merchant bars, light structural products, and other special sections, as well as semi-finished billets for re-rolling and forging applications. This segment sells its products to the construction, service center, transportation, steel warehousing, fabrication, energy, petrochemical, and original equipment manufacturing industries. The Americas Fabrication segment offers fabricated steel products for use primarily in the construction of commercial and non-commercial buildings, hospitals, convention centers, industrial plants, power plants, highways, bridges, arenas, stadiums, and dams. The International Mill segment manufactures rebars, merchant bars, and wire rods, as well as semi-finished billets; and sells fabricated rebars, fabricated meshes, assembled rebar cages, and other rebar by-products primarily to fabricators, manufacturers, distributors, and construction companies. The company was founded in 1915 and is headquartered in Irving, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 23:50
End of Day Share Price2020/02/20 00:00
Earnings2019/11/30
Annual Earnings2019/08/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.