Photo by Jason Briscoe on Unsplash
 

Nippon Steel Corp (NPSCY) is the largest steel producer in Japan and one of the top five producers globally.

NPSCY supplies steel products such as steel sheets, steel plates, pipes, tubes, bars, wire rods, and stainless steel. It is mainly exposed to the auto, construction, and energy sectors.

Steelmaking accounts for around 85%-90% of its revenue, while the remainder stems from engineering and construction, chemicals, new materials, and system solutions. Around 35%-40% of its revenue is from exports.

The company was formerly known as Nippon Steel & Sumitomo Metal Corporation and changed its name to Nippon Steel Corporation in April 2019.

Nippon Steel Corporation was incorporated in 1950 and is headquartered in Tokyo, Japan.

Three key data points gauge Nippon Steel Corp., or any dividend-paying firm.

The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.
 

NPSCY Price

Over the past year, Nippon Steel’s share price rose nearly 59% from $4.78 to $7.58 as of Wednesday’s market close.

If Nippon’s stock trades in the range of $5.00 to $10.00 this next year, its recent $7.58 share price might rise to $8.50 by next year. Of course, Nippon’s price could drop about the same $1.04 amount, or more.

My upside estimate of $1.04, however, is $0.50 below the average annual gains over the past three years.
 

NPSCY Dividend

Nippon’s most recent $0.21 variable semi-annual dividend, paid July 6th to shareholders of record March 30th, equates to about $0.42 annually to throw a yield of 5.61% as of Wednesday’s closing price.  Nippon’s SA dividend has varied between $0.03 and $0.22 in past years.
 

NPSCYReturns

Adding the $0.42 anticipated annual dividend to Nippon Steel Corp ’s estimated $1.04 price upside reveals a $1.46 potential gross gain per share for the coming year.

At Tuesday’s $7.46 closing price, a little over $1000 would buy 134 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.075 per share.

Subtracting that maybe $0.075 brokerage cost from my estimated $1.46 gross gain per share makes a net gain amounting to $1.39 X 134 shares = $185.59 for about an 18.5% net gain.

This may be the time to pounce on Nippon Steel Corp. But beware, NPSCY’s SA dividend is variable, and its price is recovering from a recent low of $2.68 as of July 31, 2020, after achieving an all-time high of  $17.57 high in January 2010. So, expect volatility in both price and dividend from NPSCY.

The foregoing article is based on past history of Nippon Steel Corp. The only accurate measure of future performance is from active investment in the company.

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