InvestBattle | Newmont vs Steel Dynamics

May 10, 2024by

As we noted in last week’s issue, over the past three months, one of the leaders of growth in the S&P 500 index has been Metals & Mining industry +14.9%.

Some of the largest companies in this industry (by market capitalization) are: Newmont ($46.8B), the world’s largest gold mining company with 17 mines in the US and other countries, and Steel Dynamics ($20.6B), a metallurgical company engaged in metal production and recycling with a production capacity of 16M tons per year.

According to the latest quarterly reporting data, we analyzed each company’s profitability, strength, and efficiency criteria using the methodology of Stanford University professor Joseph Piotroski.

As you can see, in terms of fundamental data assessment, Steel Dynamics demonstrates stronger results and outperforms Newmont in terms of profitability and sustainability. However, Newmont outperforms its competitor on the efficiency criterion.

Over the past 3 months, Newmont’s shares have risen by +18.1%, while Steel Dynamics’ have increased by +12.7% (the S&P 500 index is up +3.4%). Newmont has outperformed its closest competitor and demonstrated better results compared to the index.

So, the winner in today’s battle is Steel Dynamics (STLD). Although Newmont’s stock is showing better dynamics and prevails in terms of asset turnover, Steel Dynamics’ business looks healthier in terms of changes in return on assets, financial leverage and financing.

* This is not an investment recommendation. It is up to each individual to decide which criteria to favor when making an investment decision, taking into account their goals and individual risk tolerance.
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