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 155 industry peers in the Metals & Mining industry. CMC gets an excellent profitability rating and is at the same time showing great financial health properties. CMC has a valuation in line with the averages, but on the other hand it scores bad on growth.
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.
In the past 5 years CMC always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of CMC (0.53%) is comparable to the rest of the industry.
CMC has a Return On Equity (0.90%) which is in line with its industry peers.
Looking at the Return On Invested Capital, with a value of 6.08%, CMC is in the better half of the industry, outperforming 67.74% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CMC is above the industry average of 11.61%.
The last Return On Invested Capital (6.08%) for CMC is well below the 3 year average (15.00%), which needs to be investigated, but indicates that CMC had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.53% | ||
| ROE | 0.9% | ||
| ROIC | 6.08% |
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 has a Profit Margin (0.48%) which is in line with its industry peers.
CMC's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 6.02%, CMC is in line with its industry, outperforming 58.06% of the companies in the same industry.
In the last couple of years the Operating Margin of CMC has grown nicely.
With a Gross Margin value of 14.98%, CMC perfoms like the industry average, outperforming 47.74% of the companies in the same industry.
In the last couple of years the Gross Margin of CMC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.02% | ||
| PM (TTM) | 0.48% | ||
| GM | 14.98% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CMC is creating some value.
Compared to 1 year ago, CMC has less shares outstanding
CMC has less shares outstanding than it did 5 years ago.
The debt/assets ratio for CMC is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.80 indicates that CMC is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.80, CMC is doing good in the industry, outperforming 65.16% of the companies in the same industry.
The Debt to FCF ratio of CMC is 3.57, which is a good value as it means it would take CMC, 3.57 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of CMC (3.57) is better than 73.55% of its industry peers.
CMC has a Debt/Equity ratio of 0.32. This is a healthy value indicating a solid balance between debt and equity.
CMC's Debt to Equity ratio of 0.32 is on the low side compared to the rest of the industry. CMC is outperformed by 62.58% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 3.57 | ||
| Altman-Z | 3.8 |
ROIC/WACC0.65
WACC9.41%
2.3 Liquidity
A Current Ratio of 2.86 indicates that CMC has no problem at all paying its short term obligations.
CMC has a better Current ratio (2.86) than 61.94% of its industry peers.
A Quick Ratio of 2.00 indicates that CMC has no problem at all paying its short term obligations.
The Quick ratio of CMC (2.00) is better than 60.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.86 | ||
| Quick Ratio | 2 |
3. Growth
3.1 Past
The earnings per share for CMC have decreased strongly by -48.66% 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.
Looking at the last year, CMC shows a decrease in Revenue. The Revenue has decreased by -5.64% in the last year.
The Revenue has been growing slightly by 6.34% on average over the past years.
EPS 1Y (TTM)-48.66%
EPS 3Y7.76%
EPS 5Y16.44%
EPS Q2Q%-27.45%
Revenue 1Y (TTM)-5.64%
Revenue growth 3Y5.6%
Revenue growth 5Y6.34%
Sales Q2Q%-2.81%
3.2 Future
Based on estimates for the next years, CMC will show a decrease in Earnings Per Share. The EPS will decrease by -0.08% on average per year.
CMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.83% yearly.
EPS Next Y-33.23%
EPS Next 2Y-2.28%
EPS Next 3Y-0.08%
EPS Next 5YN/A
Revenue Next Year-1.82%
Revenue Next 2Y3.04%
Revenue Next 3Y3.83%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.44, which indicates a rather expensive current valuation of CMC.
Based on the Price/Earnings ratio, CMC is valued a bit cheaper than the industry average as 75.48% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.30, CMC is valued a bit cheaper.
With a Price/Forward Earnings ratio of 12.32, CMC is valued correctly.
69.68% of the companies in the same industry are more expensive than CMC, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of CMC to the average of the S&P500 Index (21.76), we can say CMC is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.44 | ||
| Fwd PE | 12.32 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CMC is valued a bit cheaper than 75.48% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, CMC is valued cheaply inside the industry as 87.10% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.65 | ||
| EV/EBITDA | 8.58 |
4.3 Compensation for Growth
The decent profitability rating of CMC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.18
EPS Next 2Y-2.28%
EPS Next 3Y-0.08%
5. Dividend
5.1 Amount
CMC has a Yearly Dividend Yield of 1.37%.
CMC's Dividend Yield is a higher than the industry average which is at 2.90.
With a Dividend Yield of 1.37, CMC pays less dividend than the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.37% |
5.2 History
On average, the dividend of CMC grows each year by 7.29%, which is quite nice.
CMC has paid a dividend for at least 10 years, which is 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
CMC pays out 222.70% of its income as dividend. This is not a sustainable payout ratio.
The Dividend Rate of CMC has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP222.7%
EPS Next 2Y-2.28%
EPS Next 3Y-0.08%
52.11
-0.67 (-1.27%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners93.94%
Inst Owner Change0%
Ins Owners0.57%
Ins Owner Change0.68%
Market Cap5.89B
Analysts72.94
Price Target53.19 (2.07%)
Short Float %3.89%
Short Ratio4.47
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.37% |
Yearly Dividend0.68
Dividend Growth(5Y)7.29%
DP222.7%
Div Incr Years4
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-12.54%
Min EPS beat(2)-14.1%
Max EPS beat(2)-10.99%
EPS beat(4)1
Avg EPS beat(4)-6.91%
Min EPS beat(4)-14.1%
Max EPS beat(4)0.3%
EPS beat(8)3
Avg EPS beat(8)-0.74%
EPS beat(12)7
Avg EPS beat(12)2.67%
EPS beat(16)10
Avg EPS beat(16)6.63%
Revenue beat(2)0
Avg Revenue beat(2)-1.36%
Min Revenue beat(2)-2.23%
Max Revenue beat(2)-0.49%
Revenue beat(4)1
Avg Revenue beat(4)-0.83%
Min Revenue beat(4)-2.23%
Max Revenue beat(4)0.61%
Revenue beat(8)5
Avg Revenue beat(8)0.72%
Revenue beat(12)8
Avg Revenue beat(12)0.94%
Revenue beat(16)10
Avg Revenue beat(16)0.75%
PT rev (1m)-0.03%
PT rev (3m)-8.84%
EPS NQ rev (1m)17.17%
EPS NQ rev (3m)13.22%
EPS NY rev (1m)0.04%
EPS NY rev (3m)-6.93%
Revenue NQ rev (1m)-2.4%
Revenue NQ rev (3m)-2.76%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)-0.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.44 | ||
| Fwd PE | 12.32 | ||
| P/S | 0.77 | ||
| P/FCF | 15.65 | ||
| P/OCF | 7.83 | ||
| P/B | 1.44 | ||
| P/tB | 1.69 | ||
| EV/EBITDA | 8.58 |
EPS(TTM)2.68
EY5.14%
EPS(NY)4.23
Fwd EY8.12%
FCF(TTM)3.33
FCFY6.39%
OCF(TTM)6.65
OCFY12.77%
SpS67.97
BVpS36.26
TBVpS30.92
PEG (NY)N/A
PEG (5Y)1.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.53% | ||
| ROE | 0.9% | ||
| ROCE | 7.94% | ||
| ROIC | 6.08% | ||
| ROICexc | 7.18% | ||
| ROICexgc | 8.18% | ||
| OM | 6.02% | ||
| PM (TTM) | 0.48% | ||
| GM | 14.98% | ||
| FCFM | 4.9% |
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 Turnover1.1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 3.57 | ||
| Debt/EBITDA | 1.74 | ||
| Cap/Depr | 131.44% | ||
| Cap/Sales | 4.89% | ||
| Interest Coverage | 9.05 | ||
| Cash Conversion | 100.54% | ||
| Profit Quality | 1022.25% | ||
| Current Ratio | 2.86 | ||
| Quick Ratio | 2 | ||
| Altman-Z | 3.8 |
F-Score4
WACC9.41%
ROIC/WACC0.65
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)-48.66%
EPS 3Y7.76%
EPS 5Y16.44%
EPS Q2Q%-27.45%
EPS Next Y-33.23%
EPS Next 2Y-2.28%
EPS Next 3Y-0.08%
EPS Next 5YN/A
Revenue 1Y (TTM)-5.64%
Revenue growth 3Y5.6%
Revenue growth 5Y6.34%
Sales Q2Q%-2.81%
Revenue Next Year-1.82%
Revenue Next 2Y3.04%
Revenue Next 3Y3.83%
Revenue Next 5YN/A
EBIT growth 1Y-41.41%
EBIT growth 3Y4.4%
EBIT growth 5Y12.2%
EBIT Next Year16.5%
EBIT Next 3Y13.35%
EBIT Next 5Y8%
FCF growth 1Y-52.84%
FCF growth 3Y135.07%
FCF growth 5YN/A
OCF growth 1Y-46.05%
OCF growth 3Y57.91%
OCF growth 5Y89.31%