Stelco Holdings (TSX:STLC) is a Hamilton-based producer and seller of various steel products in Canada and around the world. Shares of Stelco fell below the $5 mark during the March 2020 market pullback. However, the stock has stormed back to post all-time highs over the past year. It had climbed 410% year-over-year as of late afternoon trading on April 28.
Steel prices have soared in the second half of 2020 and first half of 2021. Prices of steel have doubled over the past six months, from $700 U.S. per tonne to about $1,300 U.S. per tonne at the time of this writing. Commodity prices have broadly rebounded as investors are optimistic about a global economic rebound. Moreover, the Biden administration is pushing for a massive infrastructure spending program.
Stelco released its fourth quarter and full year 2020 results on February 17. The company struggled mightily in 2020, but it started to see the fruits of the comeback in the fourth quarter.
Adjusted EBITDA surged 600% year-over-year to $60 million in Q4 2020. For the full year, adjusted EBITDA dropped 47% to $75 million.
Experts expect steel prices to sustain their momentum into the spring and summer of 2021.
Stelco is on track to enjoy a strong rebound earnings-wise compared to the previous year. It offers a quarterly dividend of $0.10 per share. That represents a modest 1.2% yield. Stelco is still worth stashing in your portfolio in late April.
