Evraz, Ferrexpo & Ironveld: Should you buy these 3 steel stocks?

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Evraz, Ferrexpo & Ironveld: Should you buy these 3 steel stocks?

 Evraz, Ferrexpo & Ironveld: Should you buy these 3 steel stocks?
Image source: Maks_Lab, Shutterstock.com

Highlights 

  • EVRAZ crude steel output rose by 1.0% from 3.36 million tonnes in Q2 2021 to 3.40 million tonnes in Q3 2021 due to high production at EVRAZ North America.
  • Ferrexpo’s interim dividend for H1 2021 was US 39.6 cents per share, up from 13.2 US cents per share in H1 2020.
  • Ironveld announced plans to sell a 29.9% stake to Grosvenor Resources, a private company in South Africa.

The US and the UK are discussing to remove the “damaging tariffs” associated with steel exports from Britain. The discussion was focused on addressing decarbonisation and global steel overcapacity. The removal of damaging tariffs will benefit businesses in the US and UK. The talks on steel were initiated when the two nations put to rest the Airbus-Boeing dispute in June this year.

Earlier, in May, the UK started consulting if the application of retaliatory tariffs on US steel was in the best interests of the UK economy and aluminium and steel industries. Rebalancing measures in response to US section 232 tariffs on steel and aluminium exports from the UK would remain in place until a permanent resolution is found. Department for International Trade (DIT) announced that the import taxes on US steel was critical to protect British economic interests.

In light of the latest development, let us review three steel stocks – Evraz, Ferrexpo and Ironveld and their investment prospects.

Evraz, Ferrexpo & Ironveld: One year return & Market cap

(Data source: Refinitiv)

Evraz Plc (LON: EVR)

Evraz is a vertically integrated steel manufacturing company. The company’s crude steel output rose by 1.0%, from 3.36 million tonnes in Q2 2021 to 3.40 million tonnes in Q3 2021, due to high production volumes at EVRAZ North America.

The shares of Evraz are trading at GBX 623.80, up by 0.35% on Monday, 1 November 2021. The company’s shares returned 73.46% to shareholders over the last one year, and the market cap stands at £9,067.22 million.

Evraz’s total sales of steel products declined by 8.2% quarter-on-quarter from 3.24 million tonnes in Q2 2021 to 2.97 million tonnes in Q3 2021. The company’s net profit totalled to US$1,212 million in H1 2021 compared to US$513 million in H1 2020, while its consolidated EBITDA was US$2,082 million in the period, representing an increase of 94.0% year-on-year from US$1,073 million in H1 2020. Evraz declared an interim dividend of US$0.55 per share to shareholders for 2021.

Ferrexpo Plc (LON: FXPO)

Ferrexpo plc is a commodity trading and mining firm. It is a leading exporter of iron ore pellets to the global markets. The company’s total iron ore pellet production rose by 2% year-on-year to 2.6 million tonnes in Q3 2021. In October, Ferrexpo announced decarbonisation targets to address net-zero carbon emissions by 2050.

The shares of Ferrexpo are trading at GBX 311.40, down by 0.19% on Monday, 1 November 2021. The company’s shares returned 63.59% to shareholders over the last one year, and the market cap stands at £1,836.51 million.

The company’s revenues rose by 74% year-on-year to US$1,353 million in H1 2021, and a profit after tax of US$661 million, up by 165% year-on-year in H1 2021. Ferrexpo’s interim dividend for H1 2021 was US 39.6 cents per share, up from 13.2 US cents per share in H1 2020.

Ironveld Plc (LON: IRON)

Ironveld is an AIM-listed mineral exploration and development firm. It owns high purity iron (HPI), Vanadium and Titanium in Limpopo, South Africa. The company announced plans to sell a 29.9% stake to Grosvenor Resources, a private company  in South Africa.

The shares of Ironveld are trading at GBX 1.03 on Monday, 1 November 2021. The company’s shares returned 10.35% to shareholders over the last one year, and the market cap stands at £13.49 million.

Ironveld recorded a loss before tax of £79,000 in H1 2020 compared to £276,000 in the previous year.

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