United States Steel Corporation: Growth And Income Buy Alert

United States Steel Corporation [[x]] is set to announce results for the second quarter on July 29. In addition to being rewarded with income, the most recent of which was a quarterly dividend of 25 cents per share, investors can expect growth from U.S. Steel as earnings per share are estimated to grow by 18% over the next 3 – 5 years. The industry average projection is a lower 10%.

Company Description

United States Steel Corporation produces steel, running major production operations in the United States, Canada and Central Europe. The company manufactures a wide range of value-added steel sheet and tubular products for the automotive, appliance, container, industrial machinery, construction, and oil and gas industries. U.S. Steel is headquartered in Pittsburgh, PA.

Estimates are on the Rise Ahead of the Next Earnings Announcement

Wall Street is upbeat on the steel maker. Five out of 11 covering analysts increased earnings projections for the 2008 full year to $16.00 per share from last month’s $15.11 per share. One of those analysts further boosted the forecast to $16.59. The most accurate estimate is a much more bullish $18.66.

For the second quarter, 4 out of 12 analysts upped earnings expectations to $3.79 per share from last month’s $3.68. One of the analysts bumped the projection higher to $3.80. The most accurate estimate is even higher at $3.91.

U.S. Steel is set to announce results for the second quarter on July 29, 2008.

Competitive Income

The company rewards its shareholders with income, the most recent of which was a quarterly dividend of 25 cents per share that was paid out on June 10, 2008. U.S. Steel’s dividend yield of 0.6% compares favorably to the industry average as most companies within U.S. Steel’s industry group pay no dividends.

Strong Growth

In late April, the company posted first-quarter net income of $235 million, which soared past the fourth-quarter net income of $35 million. Net sales reached a record $5.2 billion.

Management stated that its strong results reflected sharp improvements in its flat-rolled and European segments on strong operating performances as well as higher shipments and prices, adding that the company made excellent progress in integrating its Canadian facilities, which operated during the first quarter at the highest utilization rate in recent years.

U.S. Steel offers a return on equity (ROE) of 19%, surpassing the industry average of 16%. Its earnings per share are expected to grow by 18% over the next 3 – 5 years, beating the industry average expectation of 10%.

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