Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 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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7 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 7 undervalued stocks in the Metals & Mining - Iron & Steel industry for Monday, October 23, 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.

Cleveland-Cliffs Inc’s Value Grade

Value Grade:

Cleveland-Cliffs Inc. is a flat-rolled steel producer in North America. The Company is engaged in manufacturing iron ore pellets. It is vertically integrated from mined raw materials, direct reduced iron and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling, and tubing. It offers advanced high-strength steels (AHSS), hot-dipped galvanized, aluminized, galvalume, electrogalvanized, galvanneal, hot-rolled coil (HRC), cold-rolled coil, plate, tinplate, grain oriented electrical steel (GOES), non-oriented electrical steel (NOES), stainless steels, tool and die, stamped components, rail, slab and cast ingot. It provides steel solutions, such as operations of tooling and stamping, which provides advanced-engineered solutions, tool design and build, hot and cold-stamped components, and complex assemblies for the automotive market. It serves various markets, such as automotive, infrastructure and manufacturing, steel producers, and distributors and converters.

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.

Cleveland-Cliffs Inc has a Value Score of 70, which is considered to be undervalued.

When you look at Cleveland-Cliffs Inc’s price-to-sales ratio at 0.34 compared to the industry median at 0.51, this company has a lower price relative to revenue compared to its peers. This could make Cleveland-Cliffs Inc’s stock more attractive for value investors.

Cleveland-Cliffs Inc’s price-earnings ratio is 33.26 compared to the industry median at 9.73. This means it has a higher share price relative to earnings compared to its peers. This could make Cleveland-Cliffs Inc less attractive for value investors.

Now, let’s assess Cleveland-Cliffs Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 8.9, when compared to the industry median of 6.8, 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. Cleveland-Cliffs Inc’s shareholder yield is lower than its industry median ratio of 3.26%. 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. Cleveland-Cliffs Inc’s price-to-book ratio is lower than its industry median ratio of 1.02. This could make Cleveland-Cliffs Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Cleveland-Cliffs Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Cleveland-Cliffs Inc’s price-to-free-cash-flow ratio is higher than its industry median ratio of 6.81. This could make Cleveland-Cliffs Inc less attractive because the higher P/FCF ratio indicates that Cleveland-Cliffs Inc is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Commercial Metals Company’s Value Grade

Value Grade:

Commercial Metals Company is engaged in offering products and technologies for the global construction sector through manufacturing network principally located in the United States and Central Europe. The Company’s solutions support construction across a variety of applications, including infrastructure, non-residential, residential, industrial, and energy generation and transmission. Its segments include North America and Europe. The North America segment provides a diverse offering of products and solutions to support the construction sector composed primarily of a vertically integrated network of recycling facilities, steel mills and fabrication operations. The Company’s 43 scrap metal recycling facilities, primarily located in the southeast and central United States process ferrous and nonferrous scrap metals. The Europe segment is composed primarily of a vertically integrated network of recycling facilities, an EAF mini mill and fabrication operations located in Poland.

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 5.6 compared to the industry median at 9.7. 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 1.02.

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.

Gerdau SA (ADR)’s Value Grade

Value Grade:

Gerdau SA is a Brazil-based manufacturer of steel products. The Company is engaged in the production and commercialization of steel products in general, through its mills located in Argentina, Brazil, Canada, Colombia, the United States, Mexico, Peru, the Dominican Republic, Uruguay and Venezuela. The Firm’s product portfolio includes crude steel; finished products for the construction industry, such as rebar, wire-rods, structural shapes, hot-rolled coils and heavy plates; finished industrial products, such as commercial rolled-steel bars, light profiles and wires; agricultural products, such as stakes, smooth wire and barbed-wire; and special steel items. The Company’s activities include also operations of iron ore mines located in the state of Minas Gerais.

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.

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

Gerdau SA (ADR)’s price-earnings ratio is 4.0 compared to the industry median at 9.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Gerdau SA (ADR) more attractive for value investors.

Gerdau SA (ADR)’s price-to-book ratio is higher than its peers. This could make Gerdau SA (ADR) less attractive for value investors when compared to the industry median at 1.02.

You can read more about Gerdau 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.

Haynes International, Inc.’s Value Grade

Value Grade:

Haynes International, Inc. develops, manufactures, markets, and distributes technologically advanced nickel and cobalt-based alloys primarily for use in the aerospace, industrial gas turbine and chemical processing industries. Its products consist of high-temperature resistant alloys (HTA) products, and corrosion-resistant alloys (CRA) products. HTA products are used by manufacturers of equipment that is subjected to high temperatures, such as jet engines, gas turbine engines, and industrial heating and heat treatment equipment. CRA products are used in applications that require resistance to corrosive media found in chemical processing, power plant emissions control and hazardous waste treatment. The Company produces its high-performance alloys primarily in sheet, coil, and plate forms. In addition, the Company produces its products as seamless and welded tubulars, and in slab, bar, billets, and wire forms. It has manufacturing facilities in Indiana, Louisiana, and North Carolina.

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.

Haynes International, Inc. has a Value Score of 61, which is considered to be undervalued.

Haynes International, Inc.’s price-earnings ratio is 11.6 compared to the industry median at 9.7. This means that it has a higher price relative to its earnings compared to its peers. This makes Haynes International, Inc. less attractive for value investors.

Haynes International, Inc.’s price-to-book ratio is lower than its peers. This could make Haynes International, Inc. more attractive for value investors when compared to the industry median at 1.02.

You can read more about Haynes International, 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.

SIFCO Industries Inc’s Value Grade

Value Grade:

SIFCO Industries, Inc. is engaged in the production of forgings and machined components primarily for the aerospace and energy markets. The processes and services include forging, heat-treating, coating and machining. The Company produces forged components for turbine engines for commercial, business and regional aircraft as well as military aircraft and armored military vehicles; airframe applications for a variety of aircraft; industrial gas and steam turbine engines for power generation units, and other commercial applications. The Company services both original equipment manufacturers (OEM) and aftermarket customers with products that range in size from approximately 2 to 1,200 pounds. The Company's products are distributed in the United States as well as non-United States markets. The Company's manufacturing facilities are located in Cleveland, Ohio (Cleveland); Orange, California (Orange), and Maniago, Italy (Maniago).

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.

SIFCO Industries Inc has a Value Score of 78, which is considered to be undervalued.

SIFCO Industries Inc’s price-to-book ratio is higher than its peers. This could make SIFCO Industries Inc less attractive for value investors when compared to the industry median at 1.02.

You can read more about SIFCO Industries 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.

Universal Stainless & Alloy Products Inc’s Value Grade

Value Grade:

Universal Stainless & Alloy Products, Inc. is engaged in manufacturing and marketing semi-finished and finished specialty steel products, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. Its manufacturing process involves melting, remelting, heat treating, hot and cold, rolling, forging, machining and cold drawing of semi-finished and finished specialty steels. It produces a range of specialty steel grades using several manufacturing processes, including vacuum induction melting (VIM), vacuum-arc remelting (VAR), electro-slag remelting (ESR) and argon oxygen decarburization (AOD). The Company?s products are sold to service centers, forgers, and original equipment manufacturers (OEMs). Its customers process its products for use in a variety of industries, including power generation, oil and gas, heavy equipment, and general industrial markets. It also performs conversion services on materials supplied by customers.

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.

Universal Stainless & Alloy Products Inc has a Value Score of 70, which is considered to be undervalued.

Universal Stainless & Alloy Products Inc’s price-to-book ratio is higher than its peers. This could make Universal Stainless & Alloy Products Inc less attractive for value investors when compared to the industry median at 1.02.

You can read more about Universal Stainless & Alloy Products 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.

Worthington Industries, Inc.’s Value Grade

Value Grade:

Worthington Industries, Inc. is an industrial manufacturing company. The Company’s segments include Steel Processing, Consumer Products, Building Products and Sustainable Energy Solutions. The Steel Processing segment is a value-added processor of carbon flat-rolled steel, a producer of laser welded solutions, and a provider of electrical steel laminations. The Consumer Products segment consists of products in tools, outdoor living and celebrations end markets sold under brands that include Coleman Bernzomatic, Balloon Time, Mag-Torch, General, Garden-Weasel, Pactool International, and others. The Building Products segment sells refrigerant and LPG cylinders, well water and expansion tanks, and other specialty products, which are sold to gas producers and distributors. The Sustainable Energy Solutions segment sells onboard fueling systems and related services, as well as gas containment solutions and services for the storage, transport, and distribution of industrial gases.

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.

Worthington Industries, Inc. has a Value Score of 69, which is considered to be undervalued.

Worthington Industries, Inc.’s price-earnings ratio is 10.4 compared to the industry median at 9.7. This means that it has a higher price relative to its earnings compared to its peers. This makes Worthington Industries, Inc. less attractive for value investors.

Worthington Industries, Inc.’s price-to-book ratio is lower than its peers. This could make Worthington Industries, Inc. more attractive for value investors when compared to the industry median at 1.02.

You can read more about Worthington Industries, 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 7 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.

• Cleveland-Cliffs Inc stock has a Value Grade of B.
• Commercial Metals Company stock has a Value Grade of A.
• Gerdau SA (ADR) stock has a Value Grade of A.
• Haynes International, Inc. stock has a Value Grade of B.
• SIFCO Industries Inc stock has a Value Grade of B.
• Universal Stainless & Alloy Products Inc stock has a Value Grade of B.
• Worthington Industries, Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 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.

• 7 Undervalued Metals & Mining - Iron & Steel Stocks for Monday, October 23
• 7 Undervalued Metals & Mining - Iron & Steel Stocks for Friday, October 20
• Why Posco Holdings Inc (ADR)’s (PKX) Stock Is Down 6.46%
• Why Ramaco Resources Inc’s (METC) Stock Is Down 4.05%

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