This week, I'm looking for the seventh materials representative of nine for my Ivy portfolio.
That basic materials sector has has thirteen industries all related to mining, making, and delivering essential commodities. They are: agricultural inputs; aluminum; building materials; chemicals; coal; copper; industrial metals; gold; paper; silver; specialty chemicals; steel.
Today I'm reviewing a mid-cap steel company named Ternium SA. Their trading ticker symbol is TX.
Ternium SA is a producer and supplier of flat steel products in North, Central and South America.
The firm operates through two reportable segments, namely Steel, and Mining. The Steel segment engaged in the sales of steel products and other products like electricity and pig iron. The Mining segment includes the sales of iron ore products. Steel segment generates most of the revenue.
Ternium S.A. was founded in 1961 and is based in Luxembourg City, Luxembourg. Ternium S.A. is a subsidiary of Techint Holdings S.à r.l.
I use three key data points to gauge dividend-paying equities or funds like Ternium SA:
(1) Price
(2) Dividends
(3) Returns
Besides those three, several other keys will finally unlock an equity or fund in which to invest.
Those three basic keys, however, best tell whether a company has made, is making, and will make money.
TX Price
Ternium's price per share closed at $22.46 yesterday. A year ago its price was $35.87. Price fell $13.41 or 37.4% in the past year.
Assuming Ternium's stock trades in the range of $15.00 to $35.00 this year, Ternium's recent $22.46 price could rise by $3.54 and go to $26.00 by mid-July, 2020.
TX Dividends
Ternium's most recent annual dividend is $1.20 paid May 14th.
That $1.20 Annual payout produces a yield of 5.34% based on yesterday's $22.46 closing price.
Gains For TX?
Adding the $1.20 annual estimated dividend to my $3.54 estimate of Ternium's price upside shows a $4.74 potential gross annual gain, per share, which will be reduced by costs to trade those shares.
Say we pay a little over $1,000.00 today at the $22.46 recent stock price, we'd buy 45 Ternium SA shares.
A $10 broker fee paid half at purchase and half at sale will cost us $0.22 per share.
Subtract that $0.22 brokerage cost from the estimated $4.74 gross annual gain leaves a net gain of 4.52 X 45 shares = $203.40 or a 20.25% net gain on a $1,019.70 investment.
Therefore, Ternium SA whose trading ticker symbol is TX now shows a possible net gain of 20.25% including a 5.34% dividend yield.
Fifteen brokers track Ternium SA stock:
Four say "Buy" TX.
Two say TX will "Outperform" its peers.
Eight say "Hold" your TX Shares.
One says TX will "Underperform" its peers.
Their consensus score of 2.4 equates to "outperform."
Now we can look at Ternium SA and see it has made money, is making money, and could net a 20.25% gain including a 5.34% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. The actual results remain to be seen to learn if Ternium SA is worth your time and money.
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