Highlights

  • Steel Dynamics shows 80.10% basic EPS growth, a P/E of 17.87 and PEG of -0.95.
  • Third quarter net income attributable to Steel Dynamics was $756.0 million, up 87%.
  • Third quarter steel shipments were 3.8 million tons.
  • The company repurchased $590.9 million of common stock in the first nine months.

An undervalued growth stock pairs earnings growth with its P/E and PEG ratios, and Steel Dynamics (NASDAQ:STLD) shows all three: basic earnings per share grew 80.10% over one year, the trailing twelve-month P/E ratio is 17.87 and the PEG ratio, on an expected basis, is -0.95, with shares trading at USD 246.96 on October 28, 2026, up 0.06%. In its latest disclosures, the industrial metals company increased its quarterly dividend to $0.53 per share in the first quarter, completed full ownership of SDI Biocarbon Solutions on June 19, and reported third quarter 2026 net income attributable to Steel Dynamics of $756.0 million in its October 23 Form 10-Q.

Steel Dynamics is headquartered in Fort Wayne, Indiana, and incorporated in Indiana. It describes itself as an industrial metals solutions company with facilities throughout the United States and Mexico, using a circular manufacturing model with recycled scrap as the primary input. Its reportable segments are steel operations, metals recycling operations, steel fabrication operations and aluminum operations, which it added recently with a recycled aluminum flat rolled products mill in Columbus, Mississippi.

Growth: Third Quarter Earnings, Net Sales and Segments

Net income attributable to Steel Dynamics was $756.0 million in the third quarter of 2026 against $403,685 thousand a year earlier, and $1,693,523 thousand for the nine months against $919,562 thousand. Basic earnings per share were $5.29 against $2.75 for the quarter and $11.77 against $6.19 for the nine months. Diluted earnings per share were $5.26 against $2.74 for the quarter and $11.72 against $6.17 for the nine months.

Net sales were $6,509,419 thousand, up 35%, and $17,805,834 thousand for the nine months, up 29%. Operating income increased 98% to $1,006,367 thousand for the quarter. The company said steel and metals recycling metal spreads expanded. Steel operations net sales rose 24% and operating income rose 108% to $1.0 billion, with average selling prices up 25%, or $282 per ton, and metal spread up 35%.

Valuation: P/E of 17.87, PEG of -0.95 and Cash Generation

The P/E ratio of 17.87 is measured on trailing twelve-month earnings, and the PEG ratio of -0.95 on expected growth. Cash flow from operations was $1.4 billion in the first nine months against $1.2 billion in the same 2025 period.

On the third quarter call, Chief Financial Officer Theresa Wagler said the company's free cash flow has averaged $2.4 billion a year over the most recent five years, and $3.2 billion a year excluding recent transformational growth investments.

Capital Returns, Debt and Liquidity

Steel Dynamics repurchased $590.9 million of common stock in the first nine months of 2026 against $660.6 million a year earlier. At September 30, 2026, $215.9 million remained under the February 2025 program of up to $1.5 billion, which has no expiration date. The company paid cash dividends of $225.1 million in the nine months, after raising the quarterly dividend 6% from $0.50 per share.

Total debt of $4.2 billion was unchanged from December 31, 2025. Liquidity was $2.4 billion, made up of $928,558 thousand of cash and equivalents, $255,219 thousand of other investments and $1,185,667 thousand of Revolver availability, with no borrowings outstanding on the $1.2 billion Revolver. Capital investments were $411.4 million against $759.5 million.

Disclosed Risks and Outlook

Aluminum operations posted an operating loss of $26,225 thousand for the quarter against $56,510 thousand, and $140,675 thousand for the nine months against $125,872 thousand, during commissioning and startup of the mill. Steel fabrication operating income fell 15% to $90.6 million as metal spread contracted 18%, with steel input costs up 20%. Net interest expense rose to $39.3 million from $13.6 million after capitalized interest fell 72%.

The company said none of its litigation and regulatory matters is currently expected to have a material impact.

On the call, management said third quarter results came in just shy of its earlier guidance range, citing unrealized foreign currency and aluminum hedging mark-to-market adjustments of just under $30 million. Chief Executive Officer Mark Millett attributed lower aluminum production and yield to a rolling coolant issue, which Wagler said has been resolved, and Wagler said positive aluminum EBIT across the second half in total is not likely. Management expects aluminum volumes and profitability to improve in the fourth quarter and through 2027, capital investment of about $150 million in the fourth quarter, and flat-rolled steel pricing and value-added spreads to benefit fourth quarter results and 2027. Wagler succeeds Millett as Chief Executive Officer at the end of the year.