Saturday, September 15, 2007

Steel and Iron Stocks: Are They Getting Stronger?

The smelting of iron began in the second millennium BC. The first making of steel is believed to have taken place in 1400 BC, in East Africa. Now investors are looking at iron and steel as an infrastructure play. All of the following have market caps in excess of $6 billion.

Companhia Vale do Rio Doce (RIO) is a Rio de Janeiro, Brazil company that produces and markets iron ores and pellets to the steel manufacturing industry. They also produce nickel, copper, platinum, gold, silver, coal, and bauxite. The stock has a P/E of 13.67, a PEG of 7.27, and a yield of 1.2%.

Rio Tinto plc (RTP) is a company that mines for everything from iron ore to aluminum to copper to diamonds to coal to talc. Although they are based in London, they have operations in North America, Europe, Asia, Australia, and New Zealand. This $300 per share stock has a P/E ratio of 13.45, a PEG of 0.51, and a yield of 1.4%.

Arcelor Mittal (MT) is a Dutch based company that is in the business of producing and marketing steel. They have operations in North and South America, western and eastern Europe, and Africa. The stock has a P/E of 10.43, a PEG of 1.01, and a yield of 1.6%.

POSCO (PKX) is a Seoul, South Korea based company that manufactures and markets steel products throughout Korea. The stock has a P/E of 14.53, a PEG of 1.73, and a yield of 1.1%.

Tenaris SA (TS) is a Luxembourg based manufacturer and marketer of steel pipe products. It has a P/E of 13.45, a PEG of 2.23, and 1.3%.

Nucor Corp. (NUE) is the Charlotte, North Carolina based company that makes and markets steel and steel products. The P/E is 10.51, the PEG is 1.5, and the yield is 0.8%.

Companhia Siderurgica Nacional (SID) is a large Sao Paulo, Brazil based steel producer. The stock has a P/E of 14.5 and a yield of 4.1%.

Gerdau S.A. (GGB) is yet another Brazil based producer of crude steel and steel products. The stock has a P/E of 10.62, a PEG of 7.41, and a yield of 2.5%.

Mechel (MTL) is a Moscow, Russia based producer of steel, coal, and iron ore. The stock has a P/E of 8.7 and a PEG of 1.62.

Ternium S.A. (TX) is another Luxembourg based producer of flat steel and long steel products. The stock has a P/E of 6.99, a PEG of 0.74, and a yield of 1.6%.

Author does not own any of the above.

By Fred Fuld at

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