5 top US metal stocks to look at in August: NUE, TECK, STLD, AA, CMC - Kalkine Media

July 31, 2022 06:00 AM PDT | By Rupam Roy
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Highlights:

  • Nucor Corporation's (NYSE: NUE) net sales were US$ 22.28 billion for the six months ended on July 2, 2022.
  • Teck Resources Ltd's (NYSE: TECK) Q1 revenue was US$ 5.03 billion.
  • Alcoa Corporation (NYSE: AA) stock returned gains of over 19 per cent YoY.

While the metals and mining sector seems to have not provided notable gains this year, US metal stocks like Nucor Corporation (NYSE: NUE), Alcoa Corporation (NYSE: AA) and Steel Dynamics (NASDAQ: STLD) have contributed to the overall gain.

These industries are generally volatile in nature and can be described as cyclical. This means that the demand for the materials can decline during a slowdown in economic growth like a recession and increase when the economy flourishes.

For instance, the sector was one of the worst-hit sectors amid the economic slowdown during the COVID-19 pandemic but then grew notably as the economy recovered.

However, investors focused on future gains can consider mining stocks for long-term investment. So, let's explore some of the top metal and mining stocks.

Nucor Corporation (NYSE: NUE)

The leading steel producer reported its fiscal 2022 second-quarter earnings results on July 21. Its net sales climbed 34 per cent year-over-year (YoY) to US$ 11.79 billion in Q2 FY22 and were up 12 per cent from US$ 10.49 billion in Q1 FY22.

Nucor shipped a total of 6,977,000 tons to the outside customers in Q2 FY22, up nine per cent YoY. Nucor's net earnings were US$ 2.56 billion, or US$ 9.67 per diluted share in Q2 FY22, versus US$ 1.50 billion, or US$ 5.04 per diluted share, in Q2 FY21.

For the six months ended on July 2, 2022, its net sales were US$ 22.28 billion and net earnings were US$ 4.65 billion.

On a YoY basis, NUE stock rose 25.58 per cent. The metal stock increased 7.55 per cent year-to-date (YTD).

Teck Resources Ltd (NYSE: TECK)

The diversified natural resources mining firm holds a market cap of US$14.05 billion. Although the stock traded in the red this year, losing more than seven per cent, it climbed 22.77 per cent in the last 12 months.

As of writing, Teck stock was trading about 38 per cent above its 52-week low of US$ 19.13 (August 20, 2021). TECK stock's Relative Strength Index (RSI), as per Refinitive, was 35.8 on July 26. RSI value.

In Q1 FY22, Teck's revenue was US$ 5.03 billion and profit was US$ 1.57 billion. Correspondingly, in the first quarter of fiscal 2021, its revenue was US$ 2.54 billion and profit was US$ 305 million.

Steel Dynamics, Inc. (NASDAQ: STLD)

The American steel producer and metal recycler, in its second-quarter results, said that it shipped a total of 3.1 million tons of steel and recorded net sales of US$ 6.21 billion. 

Steel Dynamic's net income for the second quarter of fiscal 2022 was US$ 1.21 billion, as compared to that of US$ 4.46 billion in Q2 FY22. 

STLD stock gained 12.61 per cent this year while adding 14.49 per cent on an annual basis.

STLD's annualized dividend is US$ 1.36. Its RSI, as per Refinitive, was 51.4.

Top metal and mining stocks and their YoY returns

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Alcoa Corporation (NYSE: AA)

Alcoa Corporation is an aluminium firm with over US$ 8.40 billion in market capitalization. The Pittsburgh, Pennsylvania-based firm reported revenue of US$ 3.64 billion in Q2 FY22, noting an increase from US$ 2.83 billion in the year-ago period.

The company said the increase in revenue was primarily due to improved shipments and higher prices.

Alcoa's net income was US$549 million, or US$2.95 per diluted share, in Q2 FY22. In the previous year's second quarter, its net earnings were US$309, or US$1.53 per diluted share.

Even though AA stock traded in the red this year amid a downturn in the broader market, losing about 21.58 per cent from its stock value, it posted gains of 19.91 per cent annually.

Commercial Metals Company (NYSE: CMC)

The steel and metal firm posted a dividend yield of 1.59 per cent. Its annualized dividend is US$ 0.56.

In the third quarter of fiscal 2022, Commercial Metals' net sales were US$ 2.51 billion and net earnings were US$ 312.42 million, or US$2.54 per diluted share. In the same quarter of the previous year, its net sales were US$1.84 billion, and its net earnings were US$130.40 million, or US$1.07 per diluted share.

As of writing, CMC stock was around 27.48 per cent higher than its 52-week low of US$ 28.76 (September 20, 2021). 

This year, Commercial Metals' stock grew by 1.07 per cent. On a YoY basis, it gained 15.34 per cent. It has an RSI of 55.45, as per Refinitive.

Bottom line:

The year 2022 has been a rocky phase for the global markets due to various macroeconomic factors. Another factor that impacted economies this year was the Russia-Ukraine war, which fuelled the oil prices and further pushed inflation in an upward direction.

However, the S&P 500 Metals & Mining Industry soared 7.66 per cent YoY while increasing 0.98 per cent this year. The segment also rose more than four per cent in July.


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