15 Jan

An Investor’s Guide To Commercial Metals Company

WRITTEN BY Mohit Oberoi, CFA

Company overview

Commercial Metals Company (CMC) is a diversified metals, recycling, fabrication, and trading business. The company started out in 1915 with one recycling location. Since then, CMC has grown into a global enterprise. Today, the company operates 200 locations spread across more than 20 countries.

The company has a market capitalization of about $ 1.6 billion. It also has an impeccable dividend yield.

An Investor’s Guide To Commercial Metals Company

Topics covered in this series

In this article series, we will present a complete business overview of Commercial Metals Company and examine its differentiated business model. We will also compare CMC with its competitors, discuss CMC’s outlook, and analyze how investors can play CMC in 2015.

Competitors

Commercial Metals Company is a leading supplier of rebars in the United States. Widely used in the nonresidential construction industry, rebars strengthen concrete in bridges, highways, and buildings. Other major rebar suppliers include Nucor Corporation (NUE) and Gerdau S.A. (GGB).

Reliance Steel & Aluminum (RS) acts as a distributor for the companies mentioned above. Currently, RS is part of the SPDR S&P Metals and Mining ETF (XME). Read more about the company in our investor’s guide to Reliance Steel’s third-quarter results.

2014 has not been a great year for Commercial Metals Company. The graph above shows steel play performance in 2014. You can learn more about the outlook for the US steel industry in our series Why The US Steel Industry Has More Questions Than Answers In 2015.

In the next article, we will analyze CMC’s key operations.

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