Ternium vs CMC
This page compares Ternium (Ternium S.A.) and CMC (Commercial Metals Company) across business models, financial performance, and market context in a neutral, accessible way. It outlines corporate structures, revenue drivers, and industry roles without asserting outcomes or providing recommendations. Educational content, not financial advice.
This page compares Ternium (Ternium S.A.) and CMC (Commercial Metals Company) across business models, financial performance, and market context in a neutral, accessible way. It outlines corporate stru...
Which Baskets Do They Appear In?
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Explore BasketWhich Baskets Do They Appear In?
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Explore BasketInvestment Analysis
Ternium
TX
Pros
- CMC's recent acquisition of Foley Products Company for $1.84 billion enhances its precast platform, positioning it as the #3 U.S. precast player with immediate scale benefits.
- The company maintains strong liquidity with a current ratio of 2.82 and expects to reduce net debt/EBITDA below 2.0x within 18 months after the acquisition.
- CMC has a long history of stable shareholder returns, highlighted by 244 consecutive quarterly dividends and a steady dividend yield around 1.25%.
Considerations
- Q3 FY2025 net earnings declined to $83.1 million from $119.4 million year-over-year, indicating recent profitability pressures.
- The company's interest coverage ratio is moderate at 3.11, which could constrain financial flexibility amid rising debt from the recent acquisition.
- CMC operates in a cyclical steel industry with exposure to fluctuating raw material prices and construction sector demand, potentially increasing earnings volatility.
CMC
CMC
Pros
- Ternium has a diversified steel and mining business with operations spanning Mexico, Brazil, and Southern regions, providing geographic growth opportunities.
- Despite recent earnings volatility, Ternium exhibits strong asset growth momentum of over 32% in the trailing 12 months, indicating expansion efforts.
- The stock has strong analyst sentiment and technical interest, reflected in an overall positive consensus and increased hedge fund holdings recently.
Considerations
- Ternium reported a significant earnings miss with a negative EPS of -$3.71 in its last quarter, adversely impacting its share price.
- The company shows a negative trailing 12-month return on equity at -5.51%, suggesting challenges in profitability and capital efficiency.
- Ternium's stock price has underperformed both the US metals and mining industry and the broader market over the past year, showing weak relative performance.
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