Fact based stock research
Daido Steel (TSE:5471)

JP3491000000

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Daido Steel stock research in summary

daido.co.jp

ANALYSIS: With an Obermatt Combined Rank of 84 (better than 84% compared with investment alternatives), Daido Steel (Steel, Japan) shares have much better financial characteristics than comparable stocks. Shares of Daido Steel are a good value (attractively priced) with a consolidated Value Rank of 77 (better than 77% of alternatives), are safely financed (Safety Rank of 86, which means low debt burdens), but show below-average growth (Growth Rank of 45). ...read more

RECOMMENDATION: A Combined Rank of 84, is a strong buy recommendation based on Daido Steel's financial characteristics. As the company Daido Steel's key financial metrics exhibit good value (Obermatt Value Rank of 77) but low growth (Obermatt Growth Rank of 45) while being safely financed (Obermatt Safety Rank of 86), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 77% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	77
Growth Rank	45
Safety Rank	86
Combined Rank	84

Country	Japan
Industry	Steel
Index
Size class	X-Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Daido Steel

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	79	69	72	77
GROWTH
GROWTH	30	19	75	45
SAFETY
SAFETY	27	64	75	86
SENTIMENT
SENTIMENT	n/a	55	60	^new
360° VIEW
360° VIEW	n/a	51	85	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Daido Steel is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	79	69	72	77
GROWTH
GROWTH	30	19	75	45
SAFETY
SAFETY	27	64	75	86
COMBINED
COMBINED	46	42	90	84

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Daido Steel the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 77 (better than 77% compared with alternatives) for 2024, Daido Steel shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Daido Steel. Price-to-Sales is 70 which means that the stock price compared with what market professionals expect for future sales is lower than for 70% of comparable companies, indicating a good value for Daido Steel's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 66% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 73. Compared with other companies in the same industry, dividend yields of Daido Steel are expected to be higher than for 63% of all competitors (a Dividend Yield rank of 63). ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 77, is a buy recommendation based on Daido Steel's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Daido Steel based on its detailed value metrics. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	80	78	73	70
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	53	48	64	66
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	94	83	67	73
DIVIDEND YIELD
DIVIDEND YIELD	70	58	56	63
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	79	69	72	77

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Daido Steel; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), Daido Steel shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Daido Steel. Sales Growth has a rank of 57 which means that currently, professionals expect the company to grow more than 57% of its competitors. Capital Growth is also above 18% of competitors with a rank of 92. But Profit Growth only has a rank of 18, which means that currently professionals expect the company to grow its profits less than 82% of its competitors. And Stock Returns have also been below average with a rank of only 29. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	20	49	29	57
PROFIT GROWTH
PROFIT GROWTH	25	74	50	18
CAPITAL GROWTH
CAPITAL GROWTH	n/a	11	89	92
STOCK RETURNS
STOCK RETURNS	32	19	89	29
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	30	19	75	45

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Daido Steel.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 86 (better than 86% compared with alternatives) for 2024, the company Daido Steel has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Daido Steel is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Daido Steel. Refinancing is at 89, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 89% of its competitors. Liquidity is also good at 82, meaning the company generates more profit to service its debt than 82% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 46, which means the company has an above-average debt-to-equity ratio. It has more debt than 54% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 86 (better than 86% compared with alternatives), Daido Steel has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Daido Steel could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Daido Steel and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	4	34	34	46
REFINANCING
REFINANCING	96	83	83	89
LIQUIDITY
LIQUIDITY	17	49	82	82
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	27	64	75	86

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Daido Steel and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	20	57	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	81	74	^new
MARKET PULSE
MARKET PULSE	n/a	58	53	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	55	60	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Daido Steel.
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