Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Metals & Mining - Iron & Steel industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Metals & Mining - Iron & Steel Stock News

Before choosing which top Metals & Mining - Iron & Steel stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The iron & steel industry was negatively impacted by pandemic-related economic shutdowns, supply chain disruptions and freezes in consumption. However, the industry has experienced a swift recovery in domestic steel demand, and steel prices were at multi-year highs at the start of 2021. As of April 28, 2021, steel prices were up 57% from the beginning of the year and up 156% compared to the full-year average price in 2020. Despite the increase in profitability for steel producers as a result, the higher prices may not be sustainable given significant excess capacity. 

Why Focus on Undervalued Metals & Mining - Iron & Steel Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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6 Undervalued Metals & Mining - Iron & Steel Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Metals & Mining - Iron & Steel industry for Thursday, September 28, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Metals & Mining - Iron & Steel industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

AZZ Inc’s Value Grade

Value Grade:

AZZ Inc. is a provider of hot-dip galvanizing and coil coating solutions to a range of end-markets in North America. The Company?s segments include: The Metal Coatings segment, which provides hot-dip galvanizing, spin galvanizing, powder coating, anodizing and plating, and other surface coating applications to the steel fabrication and other industries through facilities located throughout the United States and Canada; and The Precoat Metals segment provides advanced applications of protective and decorative coatings and related value-added services for steel and aluminum coil, primarily serving the construction; appliance; heating, ventilation, and air conditioning (HVAC); container; transportation and other end markets. The Company?s business segments provide sustainable, unmatched metal coating solutions that enhance the longevity and appearance of buildings, products and infrastructure that are essential to everyday life.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

AZZ Inc has a Value Score of 66, which is considered to be undervalued.

When you look at AZZ Inc’s price-to-sales ratio at 0.76 compared to the industry median at 0.53, this company has a higher price relative to revenue compared to its peers. This could make AZZ Inc’s stock less attractive for value investors.

AZZ Inc’s price-earnings ratio is 17.80 compared to the industry median at 10.42. This means it has a higher share price relative to earnings compared to its peers. This could make AZZ Inc less attractive for value investors.

Now, let’s assess AZZ Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 6.6, when compared to the industry median of 6.6, the company may be considered overvalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. AZZ Inc’s shareholder yield is lower than its industry median ratio of 3.65%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. AZZ Inc’s price-to-book ratio is higher than its industry median ratio of 1.05. This could make AZZ Inc less attractive to investors looking for a new addition to their portfolio.

Commercial Metals Company’s Value Grade

Value Grade:

Commercial Metals Company and its subsidiaries manufacture, recycle and fabricate steel and metal products, related materials and services. The Company manufactures steel and metal products through a network of facilities that includes seven electric arc furnace (EAF) mini mills, three EAF micro mills, a rerolling mill, steel fabrication and processing plants, construction-related product warehouses, and metal recycling facilities in the United States and Poland. Its operations are conducted through two reportable segments: North America and Europe. The Company's North America segment is a vertically integrated network of recycling facilities, steel mills and fabrication operations. Europe segment is a vertically integrated network of recycling facilities, an EAF mini mill and fabrication operations located in Poland. It provides post-tensioning, barrier cable, and concrete restoration solutions. It is also focused on supplying recycled ferrous metals located in Southern California.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Commercial Metals Company has a Value Score of 91, which is considered to be undervalued.

Commercial Metals Company’s price-earnings ratio is 6.2 compared to the industry median at 10.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Commercial Metals Company more attractive for value investors.

Commercial Metals Company’s price-to-book ratio is lower than its peers. This could make Commercial Metals Company more attractive for value investors when compared to the industry median at 1.05.

You can read more about Commercial Metals Company’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Warrior Met Coal Inc’s Value Grade

Value Grade:

Warrior Met Coal, Inc. is a producer and exporter of metallurgical coal for the global steel industry from underground mines located in Brookwood, Alabama, southwest of Birmingham and near Tuscaloosa. These underground coal mines are approximately 1,400 to 2,100 feet underground, making them some of the deepest vertical shaft coal mines in North America. The Company’s operations also extract methane gas from the Blue Creek coal seam. The Company is a producer and exporter of premium met coal, also known as hard coking coal (HCC), operating longwall operations in its underground mines based in Alabama. The HCC that Warrior produces from the Blue Creek, AL, coal seam contains very low sulfur and has strong coking properties.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Warrior Met Coal Inc has a Value Score of 82, which is considered to be undervalued.

Warrior Met Coal Inc’s price-earnings ratio is 5.7 compared to the industry median at 10.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Warrior Met Coal Inc more attractive for value investors.

Warrior Met Coal Inc’s price-to-book ratio is lower than its peers. This could make Warrior Met Coal Inc more attractive for value investors when compared to the industry median at 1.05.

You can read more about Warrior Met Coal Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

ArcelorMittal SA (ADR)’s Value Grade

Value Grade:

ArcelorMittal SA is a Luxembourg-based holding company. The Company, via its subsidiaries, owns and operates steel, iron ore manufacturing and coal mining facilities in Europe, North and South America, Asia, and Africa. The Company is organized in five operating segments: NAFTA; Brazil; Europe; Africa and Commonwealth of Independent States (ACIS), and Mining. The NAFTA, Brazil, Europe, and ACIS segments produce flat, long, and tubular products including slabs, hot-rolled coil, cold-rolled coil, coated steel products, among others. The Mining segment provides steel operations and comprises all mines owned by the Company in the Americas, Europe, Africa, and countries of the Commonwealth of Independent States (CIS).

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

ArcelorMittal SA (ADR) has a Value Score of 99, which is considered to be undervalued.

ArcelorMittal SA (ADR)’s price-earnings ratio is 5.0 compared to the industry median at 10.4. This means that it has a lower price relative to its earnings compared to its peers. This makes ArcelorMittal SA (ADR) more attractive for value investors.

ArcelorMittal SA (ADR)’s price-to-book ratio is higher than its peers. This could make ArcelorMittal SA (ADR) less attractive for value investors when compared to the industry median at 1.05.

You can read more about ArcelorMittal SA (ADR)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Posco Holdings Inc (ADR)’s Value Grade

Value Grade:

Posco Holdings Inc, formerly Posco, is a Korea-based company principally engaged in the manufacture and distribution of steel products. The Company operates its business through four segments. The Steel segment produces and sells steel products such as hot rolled steel, cold rolled steel, stainless steel, among others. The Trading segment engages in the global trade, including the export and import of steel products. The Engineering and Construction (E&C;) segment plans, designs and builds industrial plants, civil engineering projects, commercial and residential buildings. The Other segment is engaged in the power plants, information and communication related services and other businesses.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Posco Holdings Inc (ADR) has a Value Score of 67, which is considered to be undervalued.

Posco Holdings Inc (ADR)’s price-earnings ratio is 32.7 compared to the industry median at 10.4. This means that it has a higher price relative to its earnings compared to its peers. This makes Posco Holdings Inc (ADR) less attractive for value investors.

Posco Holdings Inc (ADR)’s price-to-book ratio is higher than its peers. This could make Posco Holdings Inc (ADR) less attractive for value investors when compared to the industry median at 1.05.

You can read more about Posco Holdings Inc (ADR)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Steel Dynamics Inc’s Value Grade

Value Grade:

Steel Dynamics, Inc. is a steel producer and metal recycler in the United States. The Company has three segments: steel operations, metals recycling operations and steel fabrication operations. Steel operations segment consists primarily of steelmaking and various coating operations. The segment consists of its EAF steel mills, producing steel from ferrous scrap and scrap substitutes, utilizing continuous casting, automated rolling mills, and various steel coating and processing lines. Metals Recycling operations segment include both ferrous and nonferrous scrap metal processing, transportation, marketing, brokerage and scrap management services, strategically located primarily in close proximity to its steel mills and other end-user scrap consumers, across the United States, and Central and Northern Mexico. Steel fabrication operations segment include seven new millennium building systems plants that primarily serve the nonresidential construction industry across the United States.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Steel Dynamics Inc has a Value Score of 90, which is considered to be undervalued.

Steel Dynamics Inc’s price-earnings ratio is 6.2 compared to the industry median at 10.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Steel Dynamics Inc more attractive for value investors.

Steel Dynamics Inc’s price-to-book ratio is lower than its peers. This could make Steel Dynamics Inc more attractive for value investors when compared to the industry median at 1.05.

You can read more about Steel Dynamics Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Metals & Mining - Iron & Steel Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Metals & Mining - Iron & Steel stocks as well as other industrys.

Choosing Which of the 6 Best Metals & Mining - Iron & Steel Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• AZZ Inc stock has a Value Grade of B.
• Commercial Metals Company stock has a Value Grade of A.
• Warrior Met Coal Inc stock has a Value Grade of A.
• ArcelorMittal SA (ADR) stock has a Value Grade of A.
• Posco Holdings Inc (ADR) stock has a Value Grade of B.
• Steel Dynamics Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 6 undervalued stocks in the Metals & Mining - Iron & Steel industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Metals & Mining - Iron & Steel Stocks

Want to learn more about Metals & Mining - Iron & Steel stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 6 Undervalued Metals & Mining - Iron & Steel Stocks for Thursday, September 28
• 3 Undervalued Metals & Mining - Iron & Steel Stocks for Wednesday, September 27
• Why Alpha Metallurgical Resources Inc’s (AMR) Stock Is Up 5.14%
• Why Ramaco Resources Inc’s (METC) Stock Is Up 13.92%

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