NEW YORK (TheStreet) -- With the price of steel very low, steel products companies are benefiting. 

The worldwide oversupply of steel is generating losses for steel producer ArceloMittal SA (MT), and cutbacks for United States Steel Corporation (X). As a result of the glut in steel, steel prices have plunged to 2008 recession levels.

Steel products companies use steel as a major input, so they benefit from low steel prices. Steel products are used in construction and manufacturing, which are on an upswing as a result of the growing economy. As a result, steel product companies stand to reap substantial benefits.

So, what are the best steel products companies investors should be buying? Here are the top four, according to TheStreet Ratings,TheStreet's proprietary ratings tool.

TheStreet Ratings projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a buy yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a buy yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Check out which steel companies made the list. And when you're done, be sure to read about which volatile aerospace and defense stocks to buy now. Year-to-date returns are based on June 26, 2015, closing prices. The highest-rated stock appears last.

CMC ChartCMC data by YCharts
4. Commercial Metals Company (CMC)

Rating: Buy, B
Market Cap: $2 billion
Year-to-date return: 6.1%

Commercial Metals Company manufactures, recycles, and markets steel and metal products, and related materials and services in the United States and internationally.

"We rate COMMERCIAL METALS (CMC) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • COMMERCIAL METALS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, COMMERCIAL METALS increased its bottom line by earning $0.89 versus $0.64 in the prior year. This year, the market expects an improvement in earnings ($1.62 versus $0.89).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 388.6% when compared to the same quarter one year prior, rising from $11.14 million to $54.45 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Metals & Mining industry and the overall market, COMMERCIAL METALS's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 17.3%. Since the same quarter one year prior, revenues fell by 12.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for COMMERCIAL METALS is rather low; currently it is at 18.30%. Regardless of CMC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.91% trails the industry average.

STLD ChartSTLD data by YCharts
3. Steel Dynamics, Inc. (STLD)

Rating: Buy, B
Market Cap: $5.3 billion
Year-to-date return: 11.7%

Steel Dynamics, Inc., together with its subsidiaries, manufactures and sells steel products, processes and sells recycled ferrous and nonferrous metals, and fabricates and sells steel joist and decking products in the United States and internationally.

"We rate STEEL DYNAMICS INC (STLD) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 17.3%. Since the same quarter one year prior, revenues rose by 11.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 961.40% to $234.71 million when compared to the same quarter last year. In addition, STEEL DYNAMICS INC has also vastly surpassed the industry average cash flow growth rate of 11.81%.
  • STLD's debt-to-equity ratio of 0.91 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that STLD's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.51 is high and demonstrates strong liquidity.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • STEEL DYNAMICS INC's earnings per share declined by 23.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, STEEL DYNAMICS INC reported lower earnings of $0.67 versus $0.83 in the prior year. This year, the market expects an improvement in earnings ($1.14 versus $0.67).

NUE ChartNUE data by YCharts
2. Nucor Corporation (NUE)

Rating: Buy, B
Market Cap: $14.7 billion
Year-to-date return: -5.7%

Nucor Corporation manufactures and sells steel and steel products in the United States and internationally. It operates through three segments: Steel Mills, Steel Products, and Raw Materials.

"We rate NUCOR CORP (NUE) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly increased by 277.77% to $563.69 million when compared to the same quarter last year. In addition, NUCOR CORP has also vastly surpassed the industry average cash flow growth rate of 11.81%.
  • Despite currently having a low debt-to-equity ratio of 0.58, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NUE's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.95 is high and demonstrates strong liquidity.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, NUCOR CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 17.3%. Since the same quarter one year prior, revenues fell by 13.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • NUCOR CORP's earnings per share declined by 40.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NUCOR CORP increased its bottom line by earning $2.22 versus $1.52 in the prior year. For the next year, the market is expecting a contraction of 22.0% in earnings ($1.73 versus $2.22).

RS ChartRS data by YCharts
1. Reliance Steel & Aluminum Co. (RS)

Rating: Buy, B+
Market Cap: $4.8 billion
Year-to-date return: 4.3%

Reliance Steel & Aluminum Co. operates as a metals service center company.

"We rate RELIANCE STEEL & ALUMINUM CO (RS) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 17.3%. Since the same quarter one year prior, revenues slightly increased by 2.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • RELIANCE STEEL & ALUMINUM CO has improved earnings per share by 17.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, RELIANCE STEEL & ALUMINUM CO increased its bottom line by earning $4.72 versus $4.15 in the prior year. This year, the market expects an improvement in earnings ($4.89 versus $4.72).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 16.2% when compared to the same quarter one year prior, going from $87.20 million to $101.30 million.
  • Net operating cash flow has significantly increased by 149.12% to $171.40 million when compared to the same quarter last year. In addition, RELIANCE STEEL & ALUMINUM CO has also vastly surpassed the industry average cash flow growth rate of 11.81%.

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