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United States Steel
U.S. Steel sure showed its doubters. The biggest integrated steelmaker headquartered in the U.S. came out of a five-year slump to post record revenues and profits in 2004 and 2005 as steel prices soared. It did so again in 2006, even as metal prices weakened, with net income leaping 50%. Moreover, the Pittsburgh company paid down almost $600 million in debt, doubled its dividend, and contributed $190 million to its already overfunded pension plans. U.S. Steel managed it all by curtailing domestic output to keep prices from deteriorating and by cranking up its low-cost mills in Central Europe, where demand for steel was stronger. The payback for investors: a 52% jump in its share price in 2006. CEO John Surma has watched the stock rise even higher since then, lifted as well by Wall Street wagering that U.S. Steel might get gobbled up by even larger foreign competitors as the global industry consolidates.
| Overall Grade | A- |
|
| Market Data | X | |
| Market Value (2/28/2007) |
$10.5 Billion |
|
| Profitability* | 31.3% | A |
| Sales Growth Rate** | 17.0% | A- |
| 12-Month Sales | $15.7 Billion |
|
| 12-Month Net Income | $1.4 Billion |
|
| Total Return | Past 12 Months64.3% | Past 36 Months147.1% |
| Economic Sector | Materials | |
| Industry | Steel | |
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
$FOOTNOTE
