COMMERCIAL METALS CO (CMC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CMC - US2017231034 - Common Stock
77.17 USD
-0.2 (-0.26%)
CMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 156 industry peers in the Metals & Mining industry. Both the profitability and the financial health of CMC get a neutral evaluation. Nothing too spectacular is happening here. CMC is valued quite cheap, while showing a decent growth score. This is a good combination! These ratings could make CMC a good candidate for value investing.
1. Profitability
1.1 Basic Checks
- CMC had positive earnings in the past year.
- CMC had a positive operating cash flow in the past year.
- In the past 5 years CMC has always been profitable.
- Each year in the past 5 years CMC had a positive operating cash flow.
1.2 Ratios
- With a decent Return On Assets value of 4.74%, CMC is doing good in the industry, outperforming 74.36% of the companies in the same industry.
- CMC's Return On Equity of 10.15% is fine compared to the rest of the industry. CMC outperforms 75.64% of its industry peers.
- With a decent Return On Invested Capital value of 5.82%, CMC is doing good in the industry, outperforming 64.74% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for CMC is in line with the industry average of 10.34%.
- The 3 year average ROIC (10.48%) for CMC is well above the current ROIC(5.82%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.74% | ||
| ROE | 10.15% | ||
| ROIC | 5.82% |
ROA(3y)7.08%
ROA(5y)9.93%
ROE(3y)11.39%
ROE(5y)17.84%
ROIC(3y)10.48%
ROIC(5y)13.05%
1.3 Margins
- With a decent Profit Margin value of 5.46%, CMC is doing good in the industry, outperforming 69.23% of the companies in the same industry.
- In the last couple of years the Profit Margin of CMC has declined.
- CMC has a Operating Margin of 7.51%. This is in the better half of the industry: CMC outperforms 61.54% of its industry peers.
- CMC's Operating Margin has declined in the last couple of years.
- CMC's Gross Margin of 16.47% is in line compared to the rest of the industry. CMC outperforms 52.56% of its industry peers.
- CMC's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.51% | ||
| PM (TTM) | 5.46% | ||
| GM | 16.47% |
OM growth 3Y-23.36%
OM growth 5Y-5.09%
PM growth 3Y-57%
PM growth 5Y-26.62%
GM growth 3Y-9.09%
GM growth 5Y-1.94%
2. Health
2.1 Basic Checks
- CMC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- Compared to 1 year ago, CMC has less shares outstanding
- The number of shares outstanding for CMC has been reduced compared to 5 years ago.
- The debt/assets ratio for CMC is higher compared to a year ago.
2.2 Solvency
- CMC has an Altman-Z score of 3.39. This indicates that CMC is financially healthy and has little risk of bankruptcy at the moment.
- CMC has a Altman-Z score (3.39) which is comparable to the rest of the industry.
- The Debt to FCF ratio of CMC is 11.32, which is on the high side as it means it would take CMC, 11.32 years of fcf income to pay off all of its debts.
- With a decent Debt to FCF ratio value of 11.32, CMC is doing good in the industry, outperforming 60.26% of the companies in the same industry.
- A Debt/Equity ratio of 0.77 indicates that CMC is somewhat dependend on debt financing.
- CMC has a Debt to Equity ratio of 0.77. This is amonst the worse of the industry: CMC underperforms 80.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 11.32 | ||
| Altman-Z | 3.39 |
ROIC/WACC0.57
WACC10.14%
2.3 Liquidity
- CMC has a Current Ratio of 4.47. This indicates that CMC is financially healthy and has no problem in meeting its short term obligations.
- With a decent Current ratio value of 4.47, CMC is doing good in the industry, outperforming 77.56% of the companies in the same industry.
- A Quick Ratio of 3.70 indicates that CMC has no problem at all paying its short term obligations.
- CMC has a Quick ratio of 3.70. This is in the better half of the industry: CMC outperforms 73.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.47 | ||
| Quick Ratio | 3.7 |
3. Growth
3.1 Past
- CMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.60%, which is quite good.
- Measured over the past 5 years, CMC shows a small growth in Earnings Per Share. The EPS has been growing by 3.60% on average per year.
- CMC shows a small growth in Revenue. In the last year, the Revenue has grown by 2.26%.
- CMC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.33% yearly.
EPS 1Y (TTM)17.6%
EPS 3Y-27.34%
EPS 5Y3.6%
EPS Q2Q%135.9%
Revenue 1Y (TTM)2.26%
Revenue growth 3Y-4.36%
Revenue growth 5Y7.33%
Sales Q2Q%11.03%
3.2 Future
- CMC is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 23.29% yearly.
- The Revenue is expected to grow by 7.33% on average over the next years.
EPS Next Y100.29%
EPS Next 2Y40.91%
EPS Next 3Y23.29%
EPS Next 5YN/A
Revenue Next Year15.86%
Revenue Next 2Y11.27%
Revenue Next 3Y7.33%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 18.33, CMC is valued on the expensive side.
- 91.03% of the companies in the same industry are more expensive than CMC, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of CMC to the average of the S&P500 Index (27.30), we can say CMC is valued slightly cheaper.
- CMC is valuated correctly with a Price/Forward Earnings ratio of 12.34.
- Based on the Price/Forward Earnings ratio, CMC is valued cheaply inside the industry as 82.69% of the companies are valued more expensively.
- CMC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.33 | ||
| Fwd PE | 12.34 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, CMC is valued a bit cheaper than the industry average as 73.72% of the companies are valued more expensively.
- CMC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CMC is cheaper than 83.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.94 | ||
| EV/EBITDA | 12.28 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- CMC has a very decent profitability rating, which may justify a higher PE ratio.
- CMC's earnings are expected to grow with 23.29% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.18
PEG (5Y)5.1
EPS Next 2Y40.91%
EPS Next 3Y23.29%
5. Dividend
5.1 Amount
- CMC has a yearly dividend return of 0.95%, which is pretty low.
- Compared to an average industry Dividend Yield of 0.96, CMC pays a bit more dividend than its industry peers.
- With a Dividend Yield of 0.95, CMC pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.95% |
5.2 History
- On average, the dividend of CMC grows each year by 8.46%, which is quite nice.
- CMC has paid a dividend for at least 10 years, which is a reliable track record.
- CMC has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.46%
Div Incr Years4
Div Non Decr Years13
5.3 Sustainability
- 18.48% of the earnings are spent on dividend by CMC. This is a low number and sustainable payout ratio.
- CMC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP18.48%
EPS Next 2Y40.91%
EPS Next 3Y23.29%
COMMERCIAL METALS CO / CMC FAQ
What is the fundamental rating for CMC stock?
ChartMill assigns a fundamental rating of 6 / 10 to CMC.
What is the valuation status for CMC stock?
ChartMill assigns a valuation rating of 7 / 10 to COMMERCIAL METALS CO (CMC). This can be considered as Undervalued.
What is the profitability of CMC stock?
COMMERCIAL METALS CO (CMC) has a profitability rating of 6 / 10.
Can you provide the PE and PB ratios for CMC stock?
The Price/Earnings (PE) ratio for COMMERCIAL METALS CO (CMC) is 18.33 and the Price/Book (PB) ratio is 1.99.
What is the expected EPS growth for COMMERCIAL METALS CO (CMC) stock?
The Earnings per Share (EPS) of COMMERCIAL METALS CO (CMC) is expected to grow by 100.29% in the next year.