Steel Dynamics Inc (STLD)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 15.98% | 21.53% | 27.48% | 29.13% | 14.94% |
| Operating profit margin | 11.08% | 16.77% | 22.87% | 23.36% | 8.82% |
| Pretax margin | 11.30% | 17.13% | 22.56% | 22.86% | 7.35% |
| Net profit margin | 8.76% | 13.04% | 17.35% | 17.46% | 5.74% |
Steel Dynamics Inc has shown a fluctuating trend in its profitability ratios over the five years analyzed. The gross profit margin improved from 14.94% in 2020 to peak at 29.13% in 2021 before slightly decreasing to 27.48% in 2022. Subsequently, the margin declined further to 21.53% in 2023 and then to 15.98% in 2024.
The operating profit margin demonstrated a similar pattern, starting at 8.82% in 2020 and reaching a peak of 23.36% in 2021. However, it decreased to 22.87% in 2022, followed by further declines to 16.77% in 2023 and 11.08% in 2024.
The pretax margin also exhibited a comparable trend, rising from 7.35% in 2020 to 22.86% in 2021, then stabilizing at 22.56% in 2022 before declining to 17.13% in 2023 and 11.30% in 2024.
Lastly, the net profit margin followed the same pattern, increasing from 5.74% in 2020 to 17.46% in 2021, then slightly decreasing to 17.35% in 2022. However, it experienced more significant drops to 13.04% in 2023 and 8.76% in 2024.
Overall, the declining trend in profitability margins over the years suggests potential challenges in maintaining profitability for Steel Dynamics Inc. Analyzing the underlying factors contributing to these fluctuations may be crucial for strategic decision-making and performance improvement.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 13.01% | 21.14% | 35.96% | 34.32% | 9.14% |
| Return on assets (ROA) | 10.29% | 16.44% | 27.28% | 25.65% | 5.94% |
| Return on total capital | 22.82% | 35.54% | 62.88% | 67.67% | 19.94% |
| Return on equity (ROE) | 17.20% | 27.64% | 47.51% | 50.98% | 12.68% |
Steel Dynamics Inc's profitability ratios show a positive trend over the years, indicating improved efficiency in generating profits relative to assets and capital employed.
1. Operating return on assets (Operating ROA) has demonstrated substantial growth, from 9.14% in 2020 to 35.96% in 2022. Although there was a slight dip in 2023 and 2024, the company is effectively utilizing its assets to generate operating income.
2. Return on assets (ROA) also exhibits a similar upward trajectory, increasing from 5.94% in 2020 to 27.28% in 2022 before decreasing in 2023 and 2024. This ratio signifies the company's ability to generate profits from its total assets.
3. Return on total capital reflects a strong performance, with a significant surge from 19.94% in 2020 to 67.67% in 2021. Despite a decline in subsequent years, the ratio remained above 20%, indicating effective capital utilization in generating returns.
4. Return on equity (ROE) portrays a consistent growth pattern, starting at 12.68% in 2020 and reaching 47.51% in 2022. Though the ratio decreased in 2023 and 2024, it remained favorable, representing the returns earned for shareholders' equity investment.
Overall, Steel Dynamics Inc's profitability ratios illustrate a positive trend, signaling efficient management of assets and capital to drive profitability and enhance shareholder value.