Fact based stock research
Reliance Steel & Aluminum (NYSE:RS)

US7595091023

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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.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Reliance Steel & Aluminum stock research in summary

rsac.com

ANALYSIS: With an Obermatt Combined Rank of 39 (worse than 61% compared with investment alternatives), Reliance Steel & Aluminum (Steel, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Reliance Steel & Aluminum are low in value (priced high) with a consolidated Value Rank of 42 (worse than 58% of alternatives) and show below-average growth (Growth Rank of 19) but are safely financed (Safety Rank of 82), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 39, is a hold recommendation based on Reliance Steel & Aluminum's financial characteristics. As the company Reliance Steel & Aluminum's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 42) and low growth (Obermatt Growth Rank of 19), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 82) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. 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	42
Growth Rank	19
Safety Rank	82
Combined Rank	39

Country	USA
Industry	Steel
Index	S&P MIDCAP
Size class	XX-Large

14-Nov-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: Reliance Steel & Aluminum

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	57	57	47	42
GROWTH
GROWTH	63	55	27	19
SAFETY
SAFETY	54	72	69	82
SENTIMENT
SENTIMENT	n/a	51	90	^new
360° VIEW
360° VIEW	n/a	67	65	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Reliance Steel & Aluminum is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	57	57	47	42
GROWTH
GROWTH	63	55	27	19
SAFETY
SAFETY	54	72	69	82
COMBINED
COMBINED	71	72	32	39

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Reliance Steel & Aluminum the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 42 (worse than 58% compared with alternatives), Reliance Steel & Aluminum shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Reliance Steel & Aluminum. Price-to-Sales (P/S) is 64, which means that the stock price compared with what market professionals expect for future sales is lower than for 64% of comparable companies, indicating a good value concerning Reliance Steel & Aluminum's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 67, which means that dividends are expected to be higher than for 67% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 80% of alternatives (only 20% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 70% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 42, is a hold recommendation based on Reliance Steel & Aluminum's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	51	68	53	64
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	60	50	55	30
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	52	51	29	20
DIVIDEND YIELD
DIVIDEND YIELD	60	67	67	67
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	57	57	47	42

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Reliance Steel & Aluminum; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% compared with alternatives), Reliance Steel & Aluminum shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Reliance Steel & Aluminum. Only Capital Growth has a good rank of 58, which means that currently professionals expect the company to grow its invested capital more than 23% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 16 which means that currently professionals expect the company to grow less than 84% of its competitors. Profit Growth with a rank of 23 and Stock Returns with a rank of 27 are also low (below 73% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 19, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Reliance Steel & Aluminum is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. 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 limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	54	14	14	16
PROFIT GROWTH
PROFIT GROWTH	59	65	41	23
CAPITAL GROWTH
CAPITAL GROWTH	n/a	46	39	58
STOCK RETURNS
STOCK RETURNS	46	73	71	27
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	63	55	27	19

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Reliance Steel & Aluminum.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 82 (better than 82% compared with alternatives) for 2024, the company Reliance Steel & Aluminum has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Reliance Steel & Aluminum 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, where all three are above average for Reliance Steel & Aluminum. Leverage is at 76, meaning the company has a below-average debt-to-equity ratio. It has less debt than 76% of its competitors. Refinancing is at a rank of 51, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 51% of its competitors. Finally, Liquidity is also good at a rank of 82, which means that the company generates more profit to service its debt than 82% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 82 (better than 82% compared with alternatives), Reliance Steel & Aluminum has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with Reliance Steel & Aluminum but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	42	48	66	76
REFINANCING
REFINANCING	66	61	49	51
LIQUIDITY
LIQUIDITY	46	65	74	82
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	54	72	69	82

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Reliance Steel & Aluminum 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	35	54	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	30	72	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	42	73	^new
MARKET PULSE
MARKET PULSE	n/a	94	100	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	51	90	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Reliance Steel & Aluminum.
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