Three Metal Stocks Seen Outperforming

Nucor, Carpenter and Cliffs Natural should outperform their peers this earnings season on the back of performances ahead of consensus estimates.
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We expect three metals stocks to outperform their peers this earnings season on the back of performances ahead of consensus estimates, management outlooks, dividend yield, price-to-earnings ratios and competitive position.

Nucor

Nucor

(NUE) - Get Report

Thursday said it swung to a first-quarter profit of $31 million, or 10 cents a share, on a sales increase of 38%.

Analysts polled by

Bloomberg

forecast earnings of 6 cents a share, in comparison with 18 cents a share reported for the fourth quarter of 2009 and a loss of 60 cents a share in the year-earlier first quarter.

Nucor's dividend yield of 3.02% is higher than

Worthington's

(WOR) - Get Report

2.53%,

Steel Dynamics'

(STLD) - Get Report

1.83%,

AK Steel's

(AKS) - Get Report

0.94% and

U.S. Steel's

(X) - Get Report

0.82%.

The stock has four buy, six hold, and one sell ratings, as per

TheStreet's

Analyst ratings guide.

Carpenter Technology

Carpenter Technology

(CRS) - Get Report

is scheduled to announce its third-quarter results on April 27.

The company manufactures and distributes specialty cast-wrought and powder metallurgy alloys including stainless steels, high temperature (nickel, iron and cobalt base) alloys, high-strength steels, tool steels, magnetic and controlled-expansion alloys, in addition to titanium alloys.

Since aerospace accounts for about 40% of sales, the fortunes of

Boeing

(BA) - Get Report

,

Airbus

and airline operators are pivotal to earnings.

On Wednesday, Keybanc raised Carpenter to buy from hold on the back of exposure to aerospace markets, firm international presence and strong balance sheets.

Analysts polled by

Bloomberg

forecast earnings of 10 cents a share on revenue of $293 million in comparison to earnings of 30 cents reported for the same period in the prior year. For the quarter ending Dec. 31, the company reported earnings of 8 cents a share.

For the quarter ended March 31, the company will record a non-cash charge of about $5.9 million, or 13 cents a share, related to federal health care reform legislation.

At 2.67%, the dividend yield of the stock is very attractive. According to

TheStreet's

Analyst ratings guide, the stock has four buy, five hold, and no sell ratings.

Cliff Natural Resources

Cliff Natural Resources

(CLF) - Get Report

is scheduled to announce its first-quarter earnings on April 28.

Analysts polled by

Bloomberg

estimate the company to report earnings of 42 cents a share for the first quarter of 2010 with a loss of 7 cents a share and earnings of 82 cents in the first and fourth quarters of 2009, respectively.

Iron ore accounted for 85% of the company's $2.34 billion revenue for 2009. Since the new pricing of iron ore contracts will be reflected beginning next quarter, analysts polled by

Bloomberg

estimate higher earnings of $6.88 a share for 2010 and $8.38 a share for 2011.

The company has an agreement with

ArcelorMittal

(MT) - Get Report

for supply of iron ore at a discounted price, while AK Steel fulfills some of the iron ore requirements from Cliffs. These steel majors are likely to raise steel output for 2010, which will benefit Cliffs.

At about $68.87, the stock is trading at an attractive P/E ratio of 10.01.

According to

TheStreet's

Analyst ratings guide, the stock has 12 buy, three hold, and no sell ratings