Reliance Steel & Aluminum Co.
Reliance Steel & Aluminum Co. Fundamental Analysis
Reliance Steel & Aluminum Co. (RS) shows weak financial fundamentals with a PE ratio of 22.33, profit margin of 5.17%, and ROE of 10.27%. The company generates $14.4B in annual revenue with weak year-over-year growth of -6.56%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 49.3/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze RS's fundamental strength across five key dimensions:
Efficiency Score
WeakRS struggles to generate sufficient returns from assets.
Valuation Score
ModerateRS shows balanced valuation metrics.
Growth Score
WeakRS faces weak or negative growth trends.
Financial Health Score
ExcellentRS maintains a strong and stable balance sheet.
Profitability Score
WeakRS struggles to sustain strong margins.
Key Financial Metrics
Is RS Expensive or Cheap?
P/E Ratio
RS trades at 22.33 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, RS's PEG of 10.59 indicates potential overvaluation.
Price to Book
The market values Reliance Steel & Aluminum Co. at 2.30 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 11.31 times EBITDA. This signals the market has high growth expectations.
How Well Does RS Make Money?
Net Profit Margin
For every $100 in sales, Reliance Steel & Aluminum Co. keeps $5.17 as profit after all expenses.
Operating Margin
Core operations generate 7.15 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.27 in profit for every $100 of shareholder equity.
ROA
Reliance Steel & Aluminum Co. generates $7.13 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Reliance Steel & Aluminum Co. generates limited operating cash flow of $834.93M, signaling weaker underlying cash strength.
Free Cash Flow
Reliance Steel & Aluminum Co. produces free cash flow of $504.63M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $9.65 in free cash annually.
FCF Yield
RS converts 3.04% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
22.33
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
10.59
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.30
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.16
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.28
vs 25 benchmark
Current Ratio
Current assets to current liabilities
4.88
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.11
vs 25 benchmark
How RS Stacks Against Its Sector Peers
| Metric | RS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 22.33 | 27.18 | Better (Cheaper) |
| ROE | 10.27% | 860.00% | Weak |
| Net Margin | 5.17% | -121084.00% (disorted) | Weak |
| Debt/Equity | 0.28 | 0.41 | Strong (Low Leverage) |
| Current Ratio | 4.88 | 4.81 | Strong Liquidity |
| ROA | 7.13% | -7173.00% (disorted) | Weak |
RS outperforms its industry in 3 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Reliance Steel & Aluminum Co.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
51.26%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
49.69%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
31.81%
Industry Style: Cyclical, Commodity, Value
High Growth