United States Steel, a stalwart of American industry, revealed on October 26, 2023, that its board of directors had approved a regular quarterly dividend of $0.05 per share ($0.20 annualized). This announcement came after the company’s preceding payment of $0.05 per share.
Shareholders recorded as of November 6, 2023, are slated to receive the dividend on December 7, 2023.
All That Glitters May Not Be Gold
At the prevailing share price of $34.24 per share, United States Steel’s dividend yield stands at 0.58%. In a retrospective glance five years back, analyzing weekly samples, the average dividend yield averaged 0.77%, with the lowest pegged at 0.14% and the highest soaring to 2.20%. This yields volatility has a standard deviation of 0.45 (n=236). Alarmingly, the current dividend yield languishes at 0.42 standard deviations below the historical average.
Furthermore, the company’s dividend payout ratio registers at 0.04. The payout ratio elucidates how much of a company’s earnings are disbursed as dividends. A ratio exceeding one implies a dip into reserves to sustain the dividend – an unhealthy predicament. On the flip side, firms with limited growth potential are anticipated to distribute a substantial portion of their earnings, reflected in a payout ratio between 0.5 and 1.0. Conversely, enterprises with promising growth prospects are anticipated to retain some earnings for investment, manifesting in a payout ratio ranging from zero to 0.5. United States Steel’s 3-Year dividend growth rate stands at 4.00%, signifying its consistent improvement in dividend disbursements over time.
What Does the Future Hold?
With 844 funds or institutions reporting positions in United States Steel, there exists a reduction of 20 owner(s) or 2.31% in the last quarter. The average portfolio weight of all funds dedicated to X has depreciated to 0.19%, marking a 5.69% decline. The total shares owned by institutions plummeted by 1.94% in the last three months, amounting to 180,013K shares. Moreover, the put/call ratio of X sits at 1.24, painting a bearish outlook.1.24
Analyst forecasts indicate a pessimistic picture, with an average one-year price target for United States Steel hovering at 29.73 as of October 31, 2023. This projection predicts a 13.16% decline from its latest reported closing price of 34.24. In addition, the estimated annual revenue for United States Steel has been projected at $15,565MM, reflecting a 14.70% decrease. The projected annual non-GAAP EPS is set at 2.19.
Institutional Investment Insights
Turning our focus to institutional activity, various investment entities have altered their positions in United States Steel. IJH – iShares Core S&P Mid-Cap ETF holds 6,869K shares, constituting a 3.08% ownership of the company. Impressively, Marshall Wace, Llp has experienced a substantial increase in its portfolio allocation in X by 40.19% over the last quarter, seizing 6,133K shares representing 2.75% ownership of the company. On the downside, NAESX – Vanguard Small-Cap Index Fund Investor Shares executed a decrease by 10.12% in its portfolio allocation in X over the last quarter, holding 5,262K shares, amounting to 2.36% ownership of the company.
The Backbone of Industry
Established in 1901, the United States Steel Corporation is a pivotal Fortune 250 company and a premier integrated steel producer. Boasting extensive iron ore production and an annual raw steelmaking capacity of 26.2 million net tons, U. S. Steel furnishes high value-added steel products for an array of industries, including automotive, infrastructure, appliance, container, and energy. The company’s pioneering Best of BothSM integrated and mini-mill technology strategy embodies a commitment to forging a secure and sustainable future for U. S. Steel and its stakeholders, marked by a renewed emphasis on innovation and customer-centric products such as U. S. Steel’s proprietary XG3™ advanced high-strength steel. U. S. Steel is headquartered in Pittsburgh, Pennsylvania, and operates with distinction across the United States and in Central Europe.
Disclaimer: The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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