Daily Stock Pick: Steel Dynamics
A portfolio of stocks I've been building since September 3 is named Volio. It will eventually hold 52 dividend dogs. Volio is the fifth portfolio I've built (at a one dividend dog per-week pace) since 2014. Five portfolios = V for Volio!
Today I'm reviewing the third of four basic materials sector stocks striving to join my Volio folio. This could be the twenty-first pick for Volio!
That materials sector includes thirteen industries all related to mining, making, and delivering essential commodities. They are: agricultural inputs; aluminum; building materials; chemicals; coal; copper; industrial metals; steel; paper; silver; specialty chemicals; gold.
My subject today is a mid-cap steel company named, Steel Dynamics Inc. Their trading ticker symbol is STLD. This is my first ever report on Steel Dynamics Inc.
Steel Dynamics operates scrap-based steel minimills with roughly 13 million tons of annual steel production capacity.
The company manufactures steel products that primarily serve the construction, automotive, and machinery end markets. It also processes and sells recycled ferrous and nonferrous metals and operates a steel fabrication business that manufactures products for the nonresidential construction industry.
Steel Dynamics, Inc. was founded in 1993 and is headquartered in Fort Wayne, Indiana.
I use three key data points to gauge dividend-paying equities or funds like Steel Dynamics Inc:
(1) Price
(2) Dividends
(3) Returns
Besides those three, several other keys will finally unlock an equity or fund in which to invest, or not.
Those three basic keys, however, best tell whether a company has made, is making, and will make money.
STLD Price
Steel Dynamics's price per share closed at $31.87 yesterday. A year ago its price was $34.82. So, in the past nearly a year its price fell by $2.95, or just over 8.47%.
Assuming Steel Dynamics's stock trades in the range of $24 to $36 this next year, its recent $31.87 price could rise by $4.13 to reach $36.00 by January 23, 2021, assuming upward price momentum resumes.
STLD Dividends
Steel Dynamics's latest declared quarterly dividend was $0.24 per share paid January 10th.
That $0.24 Q dividend equates to $0.96 annually and yields 3.01% based on yesterday's $31.87 closing price.
STLD Gains?
Adding the $0.96 annual estimated dividend to my $4.13 estimate of Steel Dynamics Inc price upside shows a $5.09 potential gross gain, per share, which will be reduced by any costs to trade these shares.
As for costs, if we put a little under $1,000.00 today in Steel Dynamics Inc at its recent $31.87 price, would buy 31 shares of STLD.
A $10 broker fee paid half at purchase and half at sale could cost us about $0.32 per share.
Subtract that $0.32 brokerage cost from the estimated $5.09 gross estimated gain per share leaves a net gain of $4.77 X 31 shares = $147.87 or a 14.8% net gain on a $987.97 investment.
Therefore, Steel Dynamics Inc, whose trading ticker symbol is STLD shows a possible 14.8% net gain including a 3.32% 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 Steel Dynamics Inc, is worth your time and money.
Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...
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