Stock market performance: ArcelorMittal
After sharing a business overview of ArcelorMittal, we can now look at its stock market performance. Since its listing in 1997, the company has created tremendous wealth for its shareholders, making Lakshmi Mittal one of the richest people in the world. Apparently, Lakshmi, in Indian custom, is the goddess of wealth.
The past few years, though, have been disappointing for ArcelorMittal.
Must-know: ArcelorMittal stock has lagged its peers
The chart above shows the comparative returns for ArcelorMittal (MT) with other steel companies like U.S. Steel (X), Steel Dynamics (STLD), and Nucor (NUE). As you can see, ArcelorMittal has lagged all these companies.
The underperformance isn’t limited to post-2008, when the global economy went into recession and all steel company shares tanked. As you can see in the chart above, other steel companies delivered higher returns even prior to the global recession.
Today, the market capitalization for ArcelorMittal is less than its much smaller competitors. The company trades at the lowest multiples among listed steel companies.
Steel market conditions have been improving globally. Other steel companies are making profits and rewarding their shareholders with stock appreciation as well as generous dividends. Let’s analyze what went wrong with this global leader, led by an astute entrepreneur.
We’ll try to answer these questions in the next part of this series while also analyzing why the worst seems to be over for ArcelorMittal.
Investment in individual stocks comes with the risk of buying an underperforming security. Investors can mitigate that risk with ETFs, which are a cost-effective way to access an industry.
The SPDR S&P Metals and Mining ETF (XME) is one such ETF that invests in steel companies operating in the United States.