COMMERCIAL METALS CO (CMC) Stock Fundamental Analysis
NYSE:CMC - New York Stock Exchange, Inc. - US2017231034 - Common Stock - Currency: USD
CMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 152 industry peers in the Metals & Mining industry. CMC has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. CMC is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year CMC was profitable.
CMC had a positive operating cash flow in the past year.
CMC had positive earnings in each of the past 5 years.
CMC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CMC has a Return On Assets (1.09%) which is comparable to the rest of the industry.
CMC's Return On Equity of 1.82% is in line compared to the rest of the industry. CMC outperforms 59.87% of its industry peers.
CMC's Return On Invested Capital of 7.00% is fine compared to the rest of the industry. CMC outperforms 71.71% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CMC is significantly above the industry average of 8.57%.
The 3 year average ROIC (15.00%) for CMC is well above the current ROIC(7.00%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.09% | ||
| ROE | 1.82% | ||
| ROIC | 7% |
ROA(3y)13.2%
ROA(5y)11.07%
ROE(3y)23.07%
ROE(5y)20.4%
ROIC(3y)15%
ROIC(5y)13.7%
1.3 Margins
CMC's Profit Margin of 0.94% is in line compared to the rest of the industry. CMC outperforms 59.87% of its industry peers.
In the last couple of years the Profit Margin of CMC has grown nicely.
The Operating Margin of CMC (6.60%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of CMC has grown nicely.
CMC has a Gross Margin (15.39%) which is in line with its industry peers.
In the last couple of years the Gross Margin of CMC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.6% | ||
| PM (TTM) | 0.94% | ||
| GM | 15.39% |
OM growth 3Y-1.14%
OM growth 5Y5.51%
PM growth 3Y-0.05%
PM growth 5Y12.5%
GM growth 3Y1.42%
GM growth 5Y4.5%
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.
The number of shares outstanding for CMC has been reduced compared to 1 year ago.
CMC has less shares outstanding than it did 5 years ago.
CMC has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.80 indicates that CMC is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.80, CMC is in the better half of the industry, outperforming 67.11% of the companies in the same industry.
CMC has a debt to FCF ratio of 2.80. This is a good value and a sign of high solvency as CMC would need 2.80 years to pay back of all of its debts.
The Debt to FCF ratio of CMC (2.80) is better than 75.66% of its industry peers.
CMC has a Debt/Equity ratio of 0.29. This is a healthy value indicating a solid balance between debt and equity.
CMC has a Debt to Equity ratio of 0.29. This is in the lower half of the industry: CMC underperforms 60.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 2.8 | ||
| Altman-Z | 3.8 |
ROIC/WACC0.72
WACC9.71%
2.3 Liquidity
CMC has a Current Ratio of 2.82. This indicates that CMC is financially healthy and has no problem in meeting its short term obligations.
CMC's Current ratio of 2.82 is fine compared to the rest of the industry. CMC outperforms 63.82% of its industry peers.
A Quick Ratio of 1.94 indicates that CMC should not have too much problems paying its short term obligations.
CMC has a Quick ratio of 1.94. This is in the better half of the industry: CMC outperforms 61.84% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.94 |
3. Growth
3.1 Past
The earnings per share for CMC have decreased strongly by -52.41% in the last year.
CMC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.44% yearly.
CMC shows a decrease in Revenue. In the last year, the revenue decreased by -7.93%.
The Revenue has been growing slightly by 6.34% on average over the past years.
EPS 1Y (TTM)-52.41%
EPS 3Y7.76%
EPS 5Y16.44%
EPS Q2Q%-70.45%
Revenue 1Y (TTM)-7.93%
Revenue growth 3Y5.6%
Revenue growth 5Y6.34%
Sales Q2Q%-5.08%
3.2 Future
Based on estimates for the next years, CMC will show a decrease in Earnings Per Share. The EPS will decrease by -0.49% on average per year.
CMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.89% yearly.
EPS Next Y-32.87%
EPS Next 2Y-1.79%
EPS Next 3Y-0.49%
EPS Next 5YN/A
Revenue Next Year-1.65%
Revenue Next 2Y3.21%
Revenue Next 3Y3.89%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 14.92, CMC is valued correctly.
84.87% of the companies in the same industry are more expensive than CMC, based on the Price/Earnings ratio.
CMC is valuated rather cheaply when we compare the Price/Earnings ratio to 28.79, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 10.34 indicates a reasonable valuation of CMC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CMC indicates a rather cheap valuation: CMC is cheaper than 82.89% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of CMC to the average of the S&P500 Index (21.38), we can say CMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.92 | ||
| Fwd PE | 10.34 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CMC indicates a somewhat cheap valuation: CMC is cheaper than 78.95% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CMC indicates a rather cheap valuation: CMC is cheaper than 90.13% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.68 | ||
| EV/EBITDA | 6.86 |
4.3 Compensation for Growth
The decent profitability rating of CMC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.91
EPS Next 2Y-1.79%
EPS Next 3Y-0.49%
5. Dividend
5.1 Amount
CMC has a Yearly Dividend Yield of 1.70%. Purely for dividend investing, there may be better candidates out there.
CMC's Dividend Yield is a higher than the industry average which is at 2.97.
CMC's Dividend Yield is slightly below the S&P500 average, which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.7% |
5.2 History
The dividend of CMC is nicely growing with an annual growth rate of 7.29%!
CMC has been paying a dividend for at least 10 years, so it has a reliable track record.
CMC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)7.29%
Div Incr Years4
Div Non Decr Years13
5.3 Sustainability
112.78% of the earnings are spent on dividend by CMC. This is not a sustainable payout ratio.
CMC's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP112.78%
EPS Next 2Y-1.79%
EPS Next 3Y-0.49%
44.16
-0.23 (-0.52%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners92.67%
Inst Owner Change0.11%
Ins Owners0.51%
Ins Owner Change0.68%
Market Cap4.99B
Analysts72.5
Price Target58.35 (32.13%)
Short Float %3.84%
Short Ratio3.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.7% |
Yearly Dividend0.68
Dividend Growth(5Y)7.29%
DP112.78%
Div Incr Years4
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-6.93%
Min EPS beat(2)-10.99%
Max EPS beat(2)-2.86%
EPS beat(4)1
Avg EPS beat(4)-3.41%
Min EPS beat(4)-10.99%
Max EPS beat(4)0.3%
EPS beat(8)4
Avg EPS beat(8)2.73%
EPS beat(12)8
Avg EPS beat(12)6.34%
EPS beat(16)11
Avg EPS beat(16)8.99%
Revenue beat(2)1
Avg Revenue beat(2)0.06%
Min Revenue beat(2)-0.49%
Max Revenue beat(2)0.61%
Revenue beat(4)2
Avg Revenue beat(4)0.17%
Min Revenue beat(4)-1.23%
Max Revenue beat(4)1.79%
Revenue beat(8)6
Avg Revenue beat(8)1.44%
Revenue beat(12)9
Avg Revenue beat(12)1.43%
Revenue beat(16)11
Avg Revenue beat(16)1.3%
PT rev (1m)-2.65%
PT rev (3m)-10.61%
EPS NQ rev (1m)-8.7%
EPS NQ rev (3m)-32.72%
EPS NY rev (1m)-7.1%
EPS NY rev (3m)-24.04%
Revenue NQ rev (1m)0.29%
Revenue NQ rev (3m)-1.62%
Revenue NY rev (1m)1.01%
Revenue NY rev (3m)-0.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.92 | ||
| Fwd PE | 10.34 | ||
| P/S | 0.64 | ||
| P/FCF | 11.68 | ||
| P/OCF | 6.28 | ||
| P/B | 1.24 | ||
| P/tB | 1.46 | ||
| EV/EBITDA | 6.86 |
EPS(TTM)2.96
EY6.7%
EPS(NY)4.27
Fwd EY9.67%
FCF(TTM)3.78
FCFY8.56%
OCF(TTM)7.04
OCFY15.93%
SpS68.48
BVpS35.5
TBVpS30.16
PEG (NY)N/A
PEG (5Y)0.91
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.09% | ||
| ROE | 1.82% | ||
| ROCE | 9.15% | ||
| ROIC | 7% | ||
| ROICexc | 8.1% | ||
| ROICexgc | 9.26% | ||
| OM | 6.6% | ||
| PM (TTM) | 0.94% | ||
| GM | 15.39% | ||
| FCFM | 5.52% |
ROA(3y)13.2%
ROA(5y)11.07%
ROE(3y)23.07%
ROE(5y)20.4%
ROIC(3y)15%
ROIC(5y)13.7%
ROICexc(3y)17.18%
ROICexc(5y)15.83%
ROICexgc(3y)19.56%
ROICexgc(5y)17.4%
ROCE(3y)19.6%
ROCE(5y)17.94%
ROICexcg growth 3Y-7.72%
ROICexcg growth 5Y2.01%
ROICexc growth 3Y-10.89%
ROICexc growth 5Y-0.05%
OM growth 3Y-1.14%
OM growth 5Y5.51%
PM growth 3Y-0.05%
PM growth 5Y12.5%
GM growth 3Y1.42%
GM growth 5Y4.5%
F-Score4
Asset Turnover1.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 2.8 | ||
| Debt/EBITDA | 1.45 | ||
| Cap/Depr | 129.6% | ||
| Cap/Sales | 4.75% | ||
| Interest Coverage | 10.11 | ||
| Cash Conversion | 100.11% | ||
| Profit Quality | 584.2% | ||
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.94 | ||
| Altman-Z | 3.8 |
F-Score4
WACC9.71%
ROIC/WACC0.72
Cap/Depr(3y)216.7%
Cap/Depr(5y)174.63%
Cap/Sales(3y)5.34%
Cap/Sales(5y)4.44%
Profit Quality(3y)74.95%
Profit Quality(5y)90.31%
High Growth Momentum
Growth
EPS 1Y (TTM)-52.41%
EPS 3Y7.76%
EPS 5Y16.44%
EPS Q2Q%-70.45%
EPS Next Y-32.87%
EPS Next 2Y-1.79%
EPS Next 3Y-0.49%
EPS Next 5YN/A
Revenue 1Y (TTM)-7.93%
Revenue growth 3Y5.6%
Revenue growth 5Y6.34%
Sales Q2Q%-5.08%
Revenue Next Year-1.65%
Revenue Next 2Y3.21%
Revenue Next 3Y3.89%
Revenue Next 5YN/A
EBIT growth 1Y-45.47%
EBIT growth 3Y4.4%
EBIT growth 5Y12.2%
EBIT Next Year17.83%
EBIT Next 3Y13.49%
EBIT Next 5Y9.31%
FCF growth 1Y-34.99%
FCF growth 3Y135.07%
FCF growth 5YN/A
OCF growth 1Y-34%
OCF growth 3Y57.91%
OCF growth 5Y89.31%