Reliance Steel & Aluminum (NYSE:RS) - Share price, News & Analysis

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

RS ($190.06) is trading below our estimate of [[fair value]] ($349)

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

RS Stock Overview

Reliance Steel & Aluminum Co. operates as a diversified metal solutions provider and the metals service center company in the United States, Canada, and internationally.

Rewards

Trading at 45.5% below our estimate of its fair value

Earnings grew by 132.4% over the past year

Pays a reliable dividend of 1.84%

Risk Analysis

Earnings are forecast to decline by an average of 16% per year for the next 3 years

Reliance Steel & Aluminum Competitors

Steel Dynamics

NasdaqGS:STLD

US$14.8b

Ternium

NYSE:TX

US$6.6b

Commercial Metals

NYSE:CMC

US$5.0b

United States Steel

NYSE:X

US$5.8b

Price History & Performance

Summary of all time highs, changes and price drops for Reliance Steel & Aluminum
Historical stock prices
Current Share Price	US$190.06
52 Week High	US$211.66
52 Week Low	US$135.46
Beta	0.83
1 Month Change	10.14%
3 Month Change	1.36%
1 Year Change	20.64%
3 Year Change	91.48%
5 Year Change	170.97%
Change since IPO	5,163.20%

Recent News & Updates

Jul 27

Reliance Steel & Aluminum Q2 2022 Earnings Preview

Reliance Steel & Aluminum (NYSE:RS) is scheduled to announce Q2 earnings results on Thursday, July 28th, before market open. The consensus EPS Estimate is $9.01 (+78.1% Y/Y) and the consensus Revenue Estimate is $4.6B (+34.5% Y/Y). Over the last 2 years, RS has beaten EPS estimates 100% of the time and has beaten revenue estimates 75% of the time. Over the last 3 months, EPS estimates have seen 4 upward revisions and 0 downward. Revenue estimates have seen 2 upward revisions and 0 downward.

Jul 22

Under The Bonnet, Reliance Steel & Aluminum's (NYSE:RS) Returns Look Impressive

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Firstly, we'll want to see a proven...

Jul 10

Reliance Steel & Aluminum (NYSE:RS) Could Easily Take On More Debt

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Shareholder Returns

	RS	US Metals and Mining	US Market
7D	1.9%	1.5%	1.1%
1Y	20.6%	-11.7%	-13.0%

Return vs Industry: RS exceeded the US Metals and Mining industry which returned -11.7% over the past year.

Return vs Market: RS exceeded the US Market which returned -13% over the past year.

Price Volatility

Is RS's price volatile compared to industry and market?
RS volatility
RS Average Weekly Movement	5.5%
Metals and Mining Industry Average Movement	9.6%
Market Average Movement	7.9%
10% most volatile stocks in US Market	17.1%
10% least volatile stocks in US Market	3.2%

Stable Share Price: RS is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: RS's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1939	13,700	Jim Hoffman	https://www.rsac.com

Reliance Steel & Aluminum Co. operates as a diversified metal solutions provider and the metals service center company in the United States, Canada, and internationally. The company distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products; and provides metals processing services to general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and heavy industries. It also distributes non-ferrous metals products and tubular building products; and manufactures specialty extruded metals, fabricated parts, and welded components.

Reliance Steel & Aluminum Fundamentals Summary

How do Reliance Steel & Aluminum's earnings and revenue compare to its market cap?
RS fundamental statistics
Market Cap	US$11.46b
Earnings (TTM)	US$1.91b
Revenue (TTM)	US$17.00b

6.0x

P/E Ratio

0.7x

P/S Ratio

Is RS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RS income statement (TTM)
Revenue	US$17.00b
Cost of Revenue	US$11.64b
Gross Profit	US$5.36b
Other Expenses	US$3.45b
Earnings	US$1.91b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 27, 2022

Earnings per share (EPS)	31.73
Gross Margin	31.52%
Net Profit Margin	11.25%
Debt/Equity Ratio	24.0%

How did RS perform over the long term?

See historical performance and comparison

Dividends

1.8%

Current Dividend Yield

10%

Payout Ratio

Does RS pay a reliable dividends?

See RS dividend history and benchmarks

When do you need to buy RS by to receive an upcoming dividend?
Reliance Steel & Aluminum dividend dates
Ex Dividend Date	Aug 18 2022
Dividend Pay Date	Sep 02 2022
Days until Ex dividend	8 days
Days until Dividend pay date	23 days

Does RS pay a reliable dividends?

See RS dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is RS 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
Analyst Forecast

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RS. This is calculated by dividing RS's market cap by their current preferred multiple.
What is RS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$11.46b

RS 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	0.8x
Enterprise Value/EBITDA	4.5x
PEG Ratio	-0.4x

Price to Earnings Ratio vs Peers

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

RS PE Ratio vs Peers

The above table shows the PE ratio for RS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	2.7x
STLD Steel Dynamics	3.4x	-32.3%	US$14.8b
TX Ternium	1.8x	-23.6%	US$6.6b
CMC Commercial Metals	4.7x	-35.4%	US$5.0b
X United States Steel	1.2x	-64.4%	US$5.8b
RS Reliance Steel & Aluminum	6x	-16.0%	US$11.5b

Price-To-Earnings vs Peers: RS is expensive based on its Price-To-Earnings Ratio (6x) compared to the peer average (2.7x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: RS is good value based on its Price-To-Earnings Ratio (6x) compared to the US Metals and Mining industry average (8.6x)

Price to Earnings Ratio vs Fair Ratio

What is RS'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.

RS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	6x
Fair PE Ratio	10.4x

Price-To-Earnings vs Fair Ratio: RS is good value based on its Price-To-Earnings Ratio (6x) compared to the estimated Fair Price-To-Earnings Ratio (10.4x).

Share Price vs Fair Value

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

Below Fair Value: RS ($190.06) is trading below our estimate of fair value ($349)

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

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Reliance Steel & Aluminum forecast to perform in the next 1 to 3 years based on estimates from 7 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

-16.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: RS's earnings are forecast to decline over the next 3 years (-16% per year).

Earnings vs Market: RS's earnings are forecast to decline over the next 3 years (-16% per year).

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

Revenue vs Market: RS's revenue is expected to decline over the next 3 years (-6.5% per year).

High Growth Revenue: RS's revenue is forecast to decline over the next 3 years (-6.5% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: RS's Return on Equity is forecast to be low in 3 years time (14.6%).

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Past Performance

How has Reliance Steel & Aluminum performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

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

22.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RS has high quality earnings.

Growing Profit Margin: RS's current net profit margins (11.3%) are higher than last year (7.9%).

Past Earnings Growth Analysis

Earnings Trend: RS's earnings have grown significantly by 22.7% per year over the past 5 years.

Accelerating Growth: RS's earnings growth over the past year (132.4%) exceeds its 5-year average (22.7% per year).

Earnings vs Industry: RS earnings growth over the past year (132.4%) exceeded the Metals and Mining industry 65.5%.

Return on Equity

High ROE: RS's Return on Equity (27.9%) is considered high.

Discover strong past performing companies

Financial Health

How is Reliance Steel & Aluminum'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: RS's short term assets ($5.0B) exceed its short term liabilities ($1.7B).

Long Term Liabilities: RS's short term assets ($5.0B) exceed its long term liabilities ($1.9B).

Debt to Equity History and Analysis

Debt Level: RS's net debt to equity ratio (16.7%) is considered satisfactory.

Reducing Debt: RS's debt to equity ratio has reduced from 47.4% to 24% over the past 5 years.

Debt Coverage: RS's debt is well covered by operating cash flow (73.4%).

Interest Coverage: RS's interest payments on its debt are well covered by EBIT (42.2x coverage).

Balance Sheet

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Dividend

What is Reliance Steel & Aluminum 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

1.84%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: RS's dividend (1.84%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: RS's dividend (1.84%) is low compared to the top 25% of dividend payers in the US market (4.08%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (10.2%), RS's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (22.4%), RS's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

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

3.1yrs

Average management tenure

CEO

Jim Hoffman (63 yo)

3.58yrs

Tenure

US$14,245,016

Compensation

Mr. James D. Hoffman, also known as Jim, has been the Chief Executive Officer of Reliance Steel & Aluminum Co. since January 1, 2019 and has been its Director since October 22, 2019. He served as President...

CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD14.25M) is about average for companies of similar size in the US market ($USD12.91M).

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

Leadership Team

Experienced Management: RS's management team is considered experienced (3.1 years average tenure).

Board Members

Experienced Board: RS's board of directors are considered experienced (4.3 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.

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	2022/08/09 00:00
End of Day Share Price	2022/08/09 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31