Morningstar Rating

Stock Research and Analysis

by Daniel Rohr, CFA

Bulls Say

Reliance has mastered the ability to find and execute value-accretive acquisitions.
Consolidation among the metal producers has increased the company's significance as a customer relative to its peers.
A culture of continuous improvement is ingrained in the company, an important attribute for a distribution business that operates on the basis of lean inventory and quick turnaround. Read more 

Bears Say

Nearly half of the company's business is distribution-only, giving Reliance little ability to add value to its products and differentiate from competitors on anything besides price and availability.
Reliance is highly dependent on steel mills that have the ability to drastically change selling prices at their own discretion, which can cause significant inventory devaluations.
Distribution is a low-margin business, perpetually squeezed by consolidation at metal suppliers and end markets. Read more 

Management

David Hannah has been with the company since 1981, having moved through the positions of division manager, CFO, and president before becoming CEO in 1999. Performance-based compensation is evaluated with return on beginning equity measures. This measurement   Read more 

Profile

Reliance Steel & Aluminum is the largest metal service center in the United States, providing metal processing services for carbon and stainless steel, aluminum, and   Read more 

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