ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Steel Dynamics's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 13.20%.
As of today (2026-06-26), Steel Dynamics's WACC % is 12.09%. Steel Dynamics's ROC % is 11.16% (calculated using TTM income statement data).
Steel Dynamics earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Steel Dynamics (STU:SD5) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Steel Dynamics's WACC % is 12.09%. Steel Dynamics's ROC % is 11.16% (calculated using TTM income statement data).
Steel Dynamics earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Steel Dynamics ROC % Related Terms
Steel Dynamics ROC % Historical Data
* Premium members only.
The historical data trend for Steel Dynamics's ROC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Steel Dynamics (STU:SD5) has a ROC % of 13.20% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Steel Dynamics and its competitors.
Is Steel Dynamics' ROC % too high?
Steel Dynamics' current ROC % is 13.20%. The Steel industry median ROC % is 2.63. Steel Dynamics' value of 13.20% is 402.9% above this industry median. Overall, Steel Dynamics has a GF Score™ of 86/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Steel Dynamics' ROC % compare to RS and NUE?
Steel Dynamics' ROC % of 13.20% can be compared against companies in the Steel industry. The industry median ROC % is 2.63. Steel Dynamics' value of 13.20% is 402.9% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Steel company?
The median ROC % among Steel companies is 2.63, based on 624 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Steel Dynamics's current ROC % of 13.20% is 402.9% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Steel Dynamics and its competitors. For the Steel industry, the median ROC % is 2.63 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Steel Dynamics's current ROC % is 13.20%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Steel Dynamics stock overvalued right now?
Based on GuruFocus' analysis, Steel Dynamics (STU:SD5) is currently considered Significantly Overvalued. The stock's GF Value™ is €137.36, compared to a current price of €214.80 — trading 56.4% above its estimated fair value. The current ROC % is 13.20% and 402.9% above the Steel industry median of 2.63. Steel Dynamics' overall GF Score™ is 86/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Steel Dynamics (STU:SD5), the current ROC % is 13.20% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Steel Dynamics (STU:SD5) Overvalued in 2026?
Based on GuruFocus' analysis, Steel Dynamics stock appears to be overvalued.
The current stock price of €214.80 is trading 56.4% above its estimated GF Value™ of €137.36.
GuruFocus considers Steel Dynamics to be Significantly Overvalued.
Key valuation signals for STU:SD5:
ROC %: 13.20%
GF Value™: €137.36 vs. price of €214.80 (56.4% above fair value)
No single metric tells the full story. See the STU:SD5 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Steel Dynamics Inc operates as a domestic steel producer and metal recycler in the United States. The company's product portfolio comprises hot rolled sheet, hot rolled plate, painted sheet products, cold rolled sheet, and others. Its reportable segments are steel operations, metals recycling operations, steel fabrication operations, and aluminum operations. Maximum revenue is generated from its steel operations segment, which consists of manufacturing various steel products and numerous coating operations. Its primary sources of revenue are currently from the manufacture and sale of steel products, the processing and sale of recycled ferrous and nonferrous metals, and the fabrication and sale of steel joists and deck products.
86GF Score
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