This Steady Growth Mid Cap Stock Just Hiked Dividend

Commercial Metals Co. (NYSE:CMC) reported fiscal second-quarter results Thursday that missed adjusted EPS estimates but beat on revenue, sending shares lower. Earnings Miss, Revenue Beat CMC reported fiscal second-quarter adjusted earnings of $1.16 per diluted share, missing the $1.30 estimate, while sales of $2.132 billion beat the $2.091 billion estimate. Net earnings were $93.0 million, or 83 cents per diluted share, on net sales of $2.1 billion. This compares with $25.5 million, or 22 cents per diluted share, on net sales of $1.8 billion a year earlier. Margins Expand, EBITDA Surges Consolidated core EBITDA rose about 114% year over year to $297.5 million, and core EBITDA margin expanded 610 basis points to 14.0%. The quarter included net after-tax charges of $37.1 million, related primarily to acquisitions and litigation interest. An unrealized gain on commodity hedges partly offset these charges. Segment Performance In the North America Steel Group, adjusted EBITDA increased 96.9% to $269.7 million, and the margin improved to 16.8%. Product shipments were stable year over year, while backlog volumes reached their highest level since the third quarter of fiscal 2023. Construction Solutions Group net sales increased 97.9% to $314.4 million, and adjusted EBITDA rose 127.1% to $53.4 million, with margin improving to 17.0%. The precast platform contributed $33.6 million of adjusted EBITDA, or $40.3 million excluding a purchase accounting charge. Europe Steel Group posted an adjusted EBITDA loss of $1.4 million, compared with a profit of $0.8 million a year earlier. Cash Flow and Capital Allocation For the six months ended February 28, 2026, operating cash flow was $370.5 million. Cash, cash equivalents, and restricted cash totaled $503.6 million. CMC repurchased 249,154 shares for $18.3 million, with $147.8 million remaining under its authorization. Outlook, Dividend, and CEO Commentary CMC said booking and backlog levels support a strong 2026 construction season outlook and expects third-quarter core EBITDA to increase. On March 25, 2026, CMC increased its quarterly dividend by 2 cents to 20 cents per share. The dividend is payable April 15 to stockholders of record on April 6, marking an 11% increase. CMC expects third-quarter fiscal 2026 core EBITDA to increase meaningfully from second-quarter levels. Seasonal improvement and margin strength will drive growth. The company anticipates continued growth in the second half of the year. Growth is expected to be supported by its TAG program and precast platform contributions. The precast platform is expected to generate $165 million to $175 million in full-year EBITDA. Peter Matt, President and Chief Executive Officer, said, “The CMC team delivered another strong quarter, driving a more than two-fold increase in core EBITDA compared to a year ago.” “These impressive results reflect continued execution of our strategy, underpinned by additional efficiency gains from our enterprise-wide Transform, Advance, Grow (“TAG”) program and meaningful contributions from our recently acquired precast platform.” “While it has only been a few months, we are encouraged by what we have seen within our new precast platform, including a strong customer value proposition, good operational and commercial capabilities, attractive industry fundamentals, and solid synergy opportunity, all of which support our investment thesis.” CMC Price Action: Commercial Metals shares were down 1.92% at $61.21 at the time of publication on Thursday, according to Benzinga Pro data. The shares have surged about 26.63% over the past year. Photo by Piotr Swat via Shutterstock